Chapter 9, Problem 29PS

An insurance company has the business objective of reducing the amount of time it takes to approve for life insurance, the approval process consists of underwriting, which includes a review of the application, a medical information bureau check, possible requests for additional medical information and medical exams, and a policy compilation stage in which the policy pages are generated and sent for delivery. The ability to deliver approved policies to customer in a timely manner is critical to the profitability of this service. During a period of one month, you collect a random sample of 27 approved policies and store total processing times, in days, in insurance.

a. In the past, the mean processing time was 45 days. At the 0.05 level of significance, is there evidence that the mean processing time has changed from 45 days?

b. What assumption about the population distribution is needed in order to conduct the t test

in (a)?

c. Construct a boxplot or a normal probability plot to evaluate the assumption made in (b).

d. Do you think the assumption needed in order to conduct the t (a) valid? Explain.