Answered: SAMPLE NO. NO. OF INCORRECT BILLS…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Related questions

Question

The accounts receivable department at Rick Wing
Manufacturing has been having difficulty getting customers to
pay the full amount of their bills. Many customers complain
that the bills are not correct and do not reflect the materials that
arrived at their receiving docks. The depar tment has decided to
implement SPC in its billing p rocess. To set up control charts,
10 samples of 50 bills each were taken over a month's time and
the items on the bills checked against the bill of lading sent by the
company's shipping department to determine the number of bills
that were not correct. The results were: a) Determine the value of p-bar, the mean fraction defective.
T hen determine the control limits for the p-chart using a
99.73% confidence level (3 standard deviations). Has this
p rocess been in control? If not, which samples were out of
control?
b) How might you use the quality tools discussed in Chapter 6
to determine the source of the billing defects and where
you might start your improvement efforts to eliminate the
causes?