Asked by Ellen Sypolt on Apr 27, 2024
Verified
A hospital-billing auditor has been inspecting patient bills. While almost all bills contain some errors, the auditor is looking now for large errors (errors in excess of $250). Among the last 100 bills inspected, the defect rate has been 16%. Calculate the upper and lower limits for the billing process for 99.7% confidence.
Defect Rate
The frequency at which defects or errors occur in a manufacturing process or product, expressed as a percentage or the number of defects per unit.
Billing Process
The procedure involving the issuance of invoices and collection of payments from customers.
Confidence
The degree of certainty or assurance an individual has in their abilities or in the outcome of a situation.
- Conduct in-depth analysis and interpretation of process capabilities and control limits within distinct control chart types such as X-bar, R-chart, p-chart, and c-chart.
- Use the 3-sigma rules as a basis for establishing control over processes.
- Calculate the central value and measure of spread for both isolated samples and the aggregate process.
Verified Answer
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Learning Objectives
- Conduct in-depth analysis and interpretation of process capabilities and control limits within distinct control chart types such as X-bar, R-chart, p-chart, and c-chart.
- Use the 3-sigma rules as a basis for establishing control over processes.
- Calculate the central value and measure of spread for both isolated samples and the aggregate process.