Reference no: EM132684051

The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five completed mortgage transactions each were taken during a period when the process was believed to be in control. The times to complete the transactions were measured.

The Money Pit Mortgage Company made some changes to the process and undertook a process capability study. The following data were obtained for 15 samples of size 5. Based on the individual? observations, management estimated the process standard deviation to be 3.37 (days) for use in the process capability analysis. The lower and upper specification limits? (in days) for the mortgage process times were 4 and 19.

Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Mean 8 10 6 14 11 11 15 14 11 12 16 7 13 12 7

Range 11 15 5 13 12 11 10 17 16 13 7 8 14 12 13

a. Calculate the process capability index and the process capability ratio values.

The process capability index Cpk = -------- (Enter your response rounded to three decimal places.?)

The process capability ratio Cp= -------- (Enter your response rounded to three decimal places.?)

b. Suppose management would be happy with? three-sigma performance. What conclusions is management likely to draw from the capability? analysis?

Since Cpk is ---- the critical? value, the process ------ capable at the? three-sigma level.

Since Cp is ----- the critical? value, this indicates that ------

c. What remedial? actions, if? any, do you suggest that management? take?

A. The variability of the process must be greatly reduced.

B. The specification limits must be revised.

C. Management should use a lower target process capability ratio.

D. Nothing. The process is capable.