The defect rate for data entry of insurance claims at Sadegh Kazemi Insurance Co. has historically been about 1.50%. This exercise contains only parts a, b, c, d, and e. a) If you wish to use a sample size of 200, the 3-sigma control limits are:

Answer and Explanation:

Data provided in the question

defect rate i.e. = 1.50%

the sample size = n = 200

Now

= 0.008595057

Now the 3 sigma control limits is

UCL_p = + 35p

= 0.015 + 3 (0.008595057 )

= 0.04078517

LCL_p = - 35p

= 0.015 - 3 (0.008595057 )

= 0

hence, the 3 sigma control limits are UCL 0.04078517 and LCL 0 respectively

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