Refer to Exercise 7-46. Demonstrate if the existing process in making a decision on loan applications is capable of meeting a goal value of 12 weeks. Assuming a normal distribution of the decision-making time, what proportion of the applications will not meet this goal value?

Exercise 7-46

The time to evaluate and make a decision on mortgage loan applications is being examined in a financial institution. Twenty-five mortgage applications are selected from the previous month and the decision-making times, in days, are shown in Table 7-30. Construct an appropriate control chart and comment on the timeliness of the decision-making process. Revise the chart, if necessary, assuming special causes for out-of-control points. What is the expected time to make a decision? What is your estimate of the standard deviation of the time to make a decision?

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TABLE 7-30 Time to Make Decisions on Mortgage Applications Application Time (days) Application Time (days) Application Time (days) 1 16.5 10 34.5 19 19.0 2 8.0 11 20.0 20 14.5 3 14.0 12 16.0 21 18.0 4 22.0 13 13.5 22 15.0 24.5 14 12.0 23 13.5 6 15.0 15 20.5 24 12.5 7 18.5 16 18.5 25 16.0 8 10.5 17 16.5 9 14.5 18 14.0