Question

The long Life Insurance Company receives applications to buy insurance from its salespeople, who are specially trained in selling insurance to new customers. After the applications are received, they are processed through a computer. The computer is programmed so that it prints messages whenever it runs through an item that is not consistent with company policies. The company is concerned with the accuracy of the training that its salespeople received, and it contemplates recalling them for more training if the quality of their performance is blow certain limits. Five samples of 20 applications received from specific market areas were collected and inspected with the following results:

Sample	No. of Applications with Errors
1	2
2	2
3	1
4	3
5	2

(1) Find the sample size and average error rate.

(2) Compute three-sigma control limits.

(3) Draw the control chart(s).

(4) There are two new samples were taken each with 20 applications. Four and five applications were found to have mistakes, respectively. Without re-computing the control limits, is the training process out of control?

(5) Is there a need for recalling the sales force? Explain.

Answer 1

Below is the screenshot of the formula applied -

Below is the screenshot of the p chart -

Fraction Error of Sixth Sample = 4/20 = 0.20

Fraction Error of Seventh Sample = 5/20 = 0.25

Since two new sample's error fraction lies within the control limit, hence training process is in control.

Since all the erros are well within the acceptable control limits hence there is no need to recall the sales force.