One hundred insurance claim forms are inspected daily at Full Life Insurance Co.

Question

One hundred insurance claim forms are inspected daily at Full Life Insurance Co. over 25 working days, and the number of forms with errors have been recorded in the worksheet Prob. 8-42 in the C08Data.xlsx file. Construct a p-chart. If any points occur outside the control limits, assume that assignable causes have been determined. Then construct a revised chart.

Full Life Insurance Co. Day Number Defective 1 3 2 3 3 3 4 2 5 0 6 3 7 0 8 1 9 7 10 3 11 2 12 0 13 0 14 4 15 1 16 2 17 4 18 0 19 1 20 1 21 0 22 2 23 8 24 1 25 4

Explanation / Answer

The upper control limit of p chart is = p bar + 3* Square root (p*(1-p)/n)

The lower control limit = p bar - 3* Square root (p*(1-p)/n)

Central limit = p bar

The calculation are shown below

Full Life Insurance Co. Day No of items Inspected Number Defective Fraction of defective 1 100 3 0.03 2 100 3 0.03 3 100 3 0.03 4 100 2 0.02 5 100 0 0 6 100 3 0.03 7 100 0 0 8 100 1 0.01 9 100 7 0.07 10 100 3 0.03 11 100 2 0.02 12 100 0 0 13 100 0 0 14 100 4 0.04 15 100 1 0.01 16 100 2 0.02 17 100 4 0.04 18 100 0 0 19 100 1 0.01 20 100 1 0.01 21 100 0 0 22 100 2 0.02 23 100 8 0.08 24 100 1 0.01 25 100 4 0.04 p bar = 0.022 Upper Control Limit = p+ 3*square root (p*(1-p)/n) 0.612989 Lower Control Limit= p-3*square root(p*(1-p)/n) -0.22005

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