The accounts receivable department at Rick Wing Manufacturing has been having difficulty getting customers to pay the full amount of their bills. Many customers complain that the bills are not correct and do not reflect the materials that arrived at their receiving docks. The department has decided to implement SPC in its billing process. To set up control charts, 10 samples of 50 bills each were taken over a month’s time and the items on the bills checked against the bill of lading sent by the company’s shipping department to determine the number of bills that were not correct. The results were:

SAMPLE NO.

NO. OF INCORRECT BILLS SAMPLE NO.

NO. OF INCORRECT BILLS 1 6 6 5 2 5 7 3 3 11 8 4 4 4 9 7 5 0 10 2

a) Determine the value of p-bar, the mean fraction defective.

Then determine the control limits for the p-chart using a 99.73% confidence level (3 standard deviations). Has this process been in control? If not, which samples were out of control?

b) How might you use the quality tools discussed in Chapter 6 to determine the source of the billing defects and where you might start your improvement efforts to eliminate the causes?