a. Calculate the process capability index and the process capability ratio values.

The process capability index Cpk=

The process capability ratio C_p=

b. Suppose management would be happy with three-sigma performance. What conclusions is management likely to draw from the capability analysis? Which bold

Since C_pk is less than/greater than the critical value, the process is not/is capable at the three-sigma level.

Since Cp is less than/greater than the critical value, this indicates that the process variability is too large/to small.

c. What remedial actions, if any, do you suggest that management take?

A.

The variability of the process must be greatly reduced.

B.

Management should use a lower target process capability ratio.

C.

The specification limits must be revised.

D.

Nothing. The process is capable.

The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five completed mortgage transactions each were taken during a period when the process was believed to be in control. The times to complete the transactions were measured. The Money Pit Mortgage Company made some changes to the process and undertook a process capability study. The following data were obtained for 15 samples of size 5. Based on the individual observations, management estimated the process standard deviation to be 4.65 days) for use in the process capability analysis. The lower and upper specification limits (in days) for the mortgage process times were 6 and 22. 1 4 Sample Mean Range 2 10 14 9 11 3 6 5 14 5 11 11 6 9 11 7 15 9 O 00 14 16 9 11 15 10 12 12 11 16 6 12 7 7 13 13 13 14 12 11 15 7 12 12