IE-348: Assignment #7

Name:

Date:

Instructions: Complete each of the questions below. Answers may be typed in the space provided.
If needed, you can attach a separate Excel or Minitab file to your assignment submission (just make
sure to refer me to that attachment in your answer).
Data Set
A loan agency has promised that decisions about loan approval will be made in 24 hours. The table
below presents the data on the cycle time (in hours) to process loan applications.

Sample

Cycle
Time

Sample

Cycle
Time

Sample

Cycle
Time

Sample

Cycle
Time

16.3

11

22.0

21

19.3

31

16.4

16.3

12

14.7

22

14.6

32

18.2

19.3

13

18.0

23

17.8

33

19.4

15.1

14

18.9

24

15.6

34

14.1

22.2

15

19.1

25

22.5

35

16.4

19.1

16

10.6

26

17.6

36

19.6

18.5

17

18.1

27

17.2

37

17.5

18.3

18

19.6

28

20.9

38

17.1

18.7

19

20.8

29

14.8

39

21.7

10

20.2

20

16.5

30

18.2

40

20.8

1)

For the data set above, do the following:

Create a tabular CUSUM in Excel (use a shift of 1)

In the following table, I have used the original process standard deviation.
cycle
Upper
Lower
time
Cusum
C+
CCusum
N+
NTarget
Stdev
K
16.3
12.5
0.0
-0.5
-12.5
0
1
18 2.495637 1.247819
16.3
12.5
0.0
-0.9
-12.5
0
2
18
19.3
12.5
0.1
0.0
-12.5
1
0
18
15.1
12.5
0.0
-1.7
-12.5
0
1
18
22.2
12.5
3.0
0.0
-12.5
1
0
18
19.1
12.5
2.8
0.0
-12.5
2
0
18
18.5
12.5
2.1
0.0
-12.5
3
0
18
18.3
12.5
1.1
0.0
-12.5
4
0
18
18.7
12.5
0.6
0.0
-12.5
5
0
18
20.2
12.5
1.5
0.0
-12.5
6
0
18
22
12.5
4.3
0.0
-12.5
7
0
18
14.7
12.5
0.0
-2.1
-12.5
0
1
18
18
12.5
0.0
-0.8
-12.5
0
2
18
18.9
12.5
0.0
0.0
-12.5
0
0
18
19.1
12.5
0.0
0.0
-12.5
0
0
18
10.6
12.5
0.0
-6.2
-12.5
0
1
18
18.1
12.5
0.0
-4.8
-12.5
0
2
18
19.6
12.5
0.4
-2.0
-12.5
1
3
18
20.8
12.5
1.9
0.0
-12.5
2
0
18
16.5
12.5
0.0
-0.3
-12.5
0
1
18
19.3
12.5
0.1
0.0
-12.5
1
0
18
14.6
12.5
0.0
-2.2
-12.5
0
1
18
17.8
12.5
0.0
-1.1
-12.5
0
2
18
15.6
12.5
0.0
-2.3
-12.5
0
3
18
22.5
12.5
3.3
0.0
-12.5
1
0
18
17.6
12.5
1.6
0.0
-12.5
2
0
18
17.2
12.5
0.0
0.0
-12.5
0
0
18
20.9
12.5
1.7
0.0
-12.5
1
0
18
14.8
12.5
0.0
-2.0
-12.5
0
1
18
18.2
12.5
0.0
-0.5
-12.5
0
2
18
16.4
12.5
0.0
-0.9
-12.5
0
3
18
18.2
12.5
0.0
0.0
-12.5
0
0
18
19.4
12.5
0.2
0.0
-12.5
1
0
18
14.1
12.5
0.0
-2.7
-12.5
0
1
18
16.4
12.5
0.0
-3.0
-12.5
0
2
18
19.6
12.5
0.4
-0.2
-12.5
1
3
18

17.5
17.1
21.7
20.8

12.5
12.5
12.5
12.5

0.0
0.0
2.5
4.0

0.0
0.0
0.0
0.0

-12.5
-12.5
-12.5
-12.5

0
0
1
2

0
0
0
0

18
18
18
18

And I got the following chart, which suggest that process is well with in control limit.

Cycle Time
15.0
10.0

cusum

5.0
0.0
-5.0
-10.0
-15.0

11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

Period
Upper Cusum

C+

C-

Lower Cusum

And also using the Minitab software we get the following cusum chart. Which also suggest the
process to be within control
Cusum
15

UCL=13.47

Cumulative Sum

10

-5

-10
LCL=-13.47

-15
1

13

17

21

Sample

25

29

33

37

But if we decrease the sigma shift to one, we get the following table and control chart.

cycle
Upper
time
Cusum
C+
16.3
5.0
16.3
5.0
19.3
5.0
15.1
5.0
22.2
5.0
19.1
5.0
18.5
5.0
18.3
5.0
18.7
5.0
20.2
5.0
22
5.0
14.7
5.0
18
5.0
18.9
5.0
19.1
5.0
10.6
5.0
18.1
5.0
19.6
5.0
20.8
5.0
16.5
5.0
19.3
5.0
14.6
5.0
17.8
5.0
15.6
5.0
22.5
5.0
17.6
5.0
17.2
5.0
20.9
5.0
14.8
5.0
18.2
5.0
16.4
5.0
18.2
5.0
19.4
5.0
14.1
5.0
16.4
5.0
19.6
5.0
17.5
5.0
17.1
5.0

C0.0
0.0
0.8
0.0
3.7
4.3
4.3
4.1
4.3
6.0
9.5
5.7
5.2
5.6
6.2
0.0
0.0
1.1
3.4
1.4
2.2
0.0
0.0
0.0
4.0
3.1
1.8
4.2
0.5
0.2
0.0
0.0
0.9
0.0
0.0
1.1
0.1
0.0

-1.2
-2.4
-0.6
-3.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-2.8
-2.3
-0.9
0.0
-6.9
-6.3
-4.2
-0.9
-1.9
-0.1
-3.0
-2.7
-4.6
0.0
0.0
-0.3
0.0
-2.7
-2.0
-3.1
-2.4
-0.5
-3.9
-5.0
-2.9
-2.9
-3.3

Lower
Cusum
N+
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0
-5.0

N0
0
1
0
1
2
3
4
5
6
7
8
9
10
11
0
0
1
2
3
4
0
0
0
1
2
3
4
5
6
0
0
1
0
0
1
2
0

1
2
3
4
0
0
0
0
0
0
0
1
2
3
0
1
2
3
4
5
6
7
8
9
0
0
1
0
1
2
3
4
5
6
7
8
9
10

Target
Stdev
K
18
1
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18
18

0.5

21.7
20.8

5.0
5.0

3.2
5.5

0.0
0.0

-5.0
-5.0

1
2

0
0

18
18

CYCLE TIME
Upper Cusum

C+

C-

Lower Cusum

12.0
10.0
8.0
6.0
CUSUM

4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
1 2 3 4 5 6 7 8 9 1 01 11 21 31 41 51 61 71 81 92 02 12 22 32 42 52 62 72 82 93 03 13 23 33 43 53 63 73 83 94 0

SAMPLE

Also the result from the Minitab.

Cusum

Cumulative Sum

10

UCL=5

-5

LCL=-5

13

17

21

Sample

25

29

33

37

The above results suggest the process to be out of control. But with calculation from the actual
process the process is with control because all the values are within the range of H.
Provide an interpretation for the loan agency manager (what does the CUSUM show
about the loan application cycle time and process).
The process suggest that, there process is within control, there is no mean shift occurring in the
process, all the loan are processed within time.

2)

For the data set above, do the following:

Create an EWMA control chart in Excel (use =0.1 and L=2.7)

EWMA
20.3
19.90
19.8
19.3

UCL

EWMA

18.8
18.3

CL

18.05

17.8
17.3
LCL
16.8
16.20

16.3
15.8

1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031323334353637383940
EWMA

Create an EWMA control chart in Minitab (use =0.1 and L=2.7)

EWMA Chart of Cycle Time

20

UCL=19.904

19

EWMA

2)

__
X=18.05

18

17

LCL=16.196

16
1

13

17

21

25

29

33

37

Sample

Does the process seem in statistical control? Why or why not?

The process is well within the control, all the points are inside the limit.

Provide an interpretation for the loan agency manager (what does the EWMA show
about the loan application cycle time and process).

Its shows that the loans are processed within 24 hours of time, and from the taken sample
there is no sudden shift in the process.

Is the interpretation of the EWMA control chart consistent with the CUSUM?

Yes the results we got from the both the charts are consistent and similar as both of them
suggest the process to be within the control.