Question

An insurance company has the business objective of reducing the amount of time it takes to approve applications for life insurance. The approval process consists of underwriting, which includes a review of the application, a medical information bureau check, possible requests for additional medical information and medical exams, and a policy compilation stage in which policy pages are generated and sent for delivery. The ability to deliver the policies to customers in a timely manner is critical to the profitability of the service. During a period of one month, a random sampling of 27 approved policies is selected, and the total processing time, in days, is collected. These data are stored in the table called Insurance.

73 19 16 64 28 28 31 90 60 56 31 56 31 56 22 18 45 48 17 17 17 91 92 63 50 51 69 16 17

A.         In the past, the mean processing time was 45 days. At the 0.05 level of significance, is there evidence that the mean processing time has changed in 45 days?

B.         What assumption about the population distribution is needed to conduct the t-test?

C.         Construct a boxplot or a normal probability plot to evaluate the assumption made in (b).

D. Do you think that the assumption needed in order to conduct the t-test in(a) is valid? Explain.

Use Excel to solve part C

Answer 1