Lahey Motors specializes in selling cars to buyers with a po

Lahey Motors specializes in selling cars to buyers with a poor credit history. Listed below is the number of cars that were repossessed from Lahey customers because they did not meet the payment obligations over each of the last 36 months.

7

4

11

16

11

8

6

3

6

6

15

11

6

14

12

4

4

11

8

11

Find the control limits from the c-bar data for the number repossessed.

Solution

c bar = Total number of defects/Total number of observations = 325/36 = 9.0278

LCL = c bar - 3*sqrt(c bar) = 9.0278 - 3*sqrt(9.0278) = 0.0139

UCL = c bar + 3*sqrt(c bar) = 9.0278 + 3*sqrt(9.0278) = 18.0417