MAT 510 – Homework Assignment
Homework Assignment 6
Due in Week 7 and worth 30 points
The data in the table below is from a study conducted by an insurance company to determine the effect of
changing the process by which insurance claims are approved. The goal was to improve policyholder
satisfaction by speeding up the process and eliminating some non-value-added approval steps in the
process. The response measured was the average time required to approve and mail all claims initiated
in a week. The new procedure was tested for 12 weeks, and the results were compared to the process
performance for the 12 weeks prior to instituting the change.
Table: Insurance Claim Approval Times (days)
Old
Process
New
Process
Elapsed Time
Week
1
2
3
4
5
6
7
8
9
10
11
12
Elapsed Time
Week
31.7
27
33.8
30
32.5
33.5
38.2
37.5
29
31.3
38.6
39.3
13
14
15
16
17
18
19
20
21
22
23
24
24
25.8
31
23.5
28.5
25.6
28.7
27.4
28.5
25.2
24.5
23.5
Use the date in table above and answer the following questions in the space provided below:
1. What was the average effect of the process change? Did the process average increase or
decrease and by how much?
2. Analyze the data using the regression model y = b0 + b1x, where y = time to approve and
mail a claim (weekly average), x = 0 for the old process, and x = 1 for the new process.
3. How does this model measure the effect of the process change?
4. How much did the process performance change on the average? (Hint: Compare the values
of b1 and the average of new process performance minus the average of the performance of
the old process.)
Type your answers below and submit this file in Week 7 of the online course shell:
MAT 510 – Homework Assignment
1.
The average effect of the process change was more streamlined. The process
average decreased
2. According to my regression model, the old process was not efficient. The times to
mail a claim weren’t consistent. When the new process was in place the time
differences were much closer resulting in more efficiency and consistency.
3. The model measures the effect of the process time by charting the time it takes to
process and mail claims before and after changing the process over a 24 week time
period.
4. The process changed by .5322. The old process was .6476 and the new process was .
1154. These number values show that the new process time is significantly lower than
the old process time
