During the last month, an insurance company has been studying the amount of insurance claims with mistakes, made by its clients: These claims represent extra costs to the company.
They have provided you with 60 samples, each with 100 insurances claims, for a total of 6000, and the number of insurance claims with mistakes, Non-Compliance, in each sample. Develop a p-chart with 3 sigma limit and comment on the process.
If the process is out-of-control, the company will institutionalize a new process that will guide customers on how to properly fill out the claims. The actual cost of amending a claim with mistakes (calling the customer, updating files, etc.) is $2/claim.
The cost to guide a customer would cost $1.25.
What would be the best action plan that the company should implement;
(1) Letting things as they are or (2) institutionalizing the new process? Illustrate and explain.
| Sample Number |
Non- Compliance |
Sample Number |
Non-Compliance |
| 1 |
7 |
31 |
13 |
| 2 |
8 |
32 |
11 |
| 3 |
10 |
33 |
5 |
| 4 |
8 |
34 |
8 |
| 5 |
14 |
35 |
14 |
| 6 |
3 |
36 |
5 |
| 7 |
12 |
37 |
11 |
| 8 |
14 |
38 |
5 |
| 9 |
11 |
39 |
5 |
| 10 |
9 |
40 |
15 |
| 11 |
10 |
41 |
6 |
| 12 |
12 |
42 |
8 |
| 13 |
7 |
43 |
12 |
| 14 |
10 |
44 |
15 |
| 15 |
9 |
45 |
13 |
| 16 |
15 |
46 |
8 |
| 17 |
4 |
47 |
11 |
| 18 |
12 |
48 |
14 |
| 19 |
5 |
49 |
10 |
| 20 |
6 |
50 |
15 |
| 21 |
14 |
51 |
10 |
| 22 |
6 |
52 |
11 |
| 23 |
5 |
53 |
11 |
| 24 |
10 |
54 |
4 |
| 25 |
6 |
55 |
5 |
| 26 |
4 |
56 |
10 |
| 27 |
13 |
57 |
6 |
| 28 |
14 |
58 |
14 |
| 29 |
14 |
59 |
15 |
| 30 |
11 |
60 |
9 |