PROCESS CAPABILITY RATIO (CP). In a GE insurance claims process, x = 210.0 minutes, and σ = .516 minutes. The design specification to meet customer expectations is 210 ± 3 minutes. So the Upper Specification is 213 minutes and the lower specification is 207 minutes. The OM manager wants to compute

Question

PROCESS CAPABILITY RATIO ([latex]C_P[/latex]). In a GE insurance claims process, [latex]\bar{x}[/latex] = 210.0 minutes, and σ = .516 minutes.

The design specification to meet customer expectations is 210 ± 3 minutes. So the Upper Specification is 213 minutes and the lower specification is 207 minutes. The OM manager wants to compute the process capability ratio.
APPROACH [latex]\blacktriangleright[/latex] GE applies Equation (S6-13).

[latex]C_p = \frac{Upper specification - Lower specification}{6\sigma}[/latex] (S6-13)

Accepted Answer

SOLUTION [latex]\blacktriangleright[/latex] [latex]C_p = \frac{Upper specification - Lower specification}{6\sigma} = \frac{213 - 207}{6(.516)} = 1.938[/latex]

INSIGHT [latex]\blacktriangleright[/latex] Because a ratio of 1.00 means that 99.73% of a process’s outputs are within specifications, this ratio suggests a very capable process, with nonconformance of less than 4 claims per million.

LEARNING EXERCISE [latex]\blacktriangleright[/latex] If σ = .60 (instead of .516), what is the new [latex]C_p[/latex]? [Answer: 1.667, a very capable process still.]

RELATED PROBLEMS [latex]\blacktriangleright[/latex] S6.40, S6.41 (S6.50 is available in MyOMLab)
ACTIVE MODEL S6.3 This example is further illustrated in Active Model S6.3 in MyOMLab.
EXCEL OM Data File Ch06SExS6.xls can be found in MyOMLab.

Question 6.S6: PROCESS CAPABILITY RATIO (CP). In a GE insurance claims proc...

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