Question

A manager in an insurance claims operation needed to estimate the time required, on average, to process a claim from the time a customer first contacted the insurance company until a check was issued or, otherwise, the claim was rejected. The company’s computer systems did not track such information, but it could be determined from the computer database that an average of 55,000 claims was processed per year and the average number of claims in process at any one time was 2,500. How long, on average does it take to process a claim?

Answer 1

the time required, on average, to process a claim from the time a customer first contacted the insurance company until a check was issued is calculated as ;
Solution,
average claims processed per year = 55,000
average number of claims in process at any one time = 2,500
The number of days to process a claim= average claims processed per year/average number of claims in process at any one time
The number of days to process a claim = 55,000/2500
The number of days to process a claim = 22days