Purpose of Assignment The purpose of the assignment is to develop students’ abilities in using datasets to apply the concepts of sampling distributions and confidence intervals to make management decisions. Assignment Steps Resources: Microsoft Excel®, The Payment Time Case Study, The Payment Time Case Data Set Review the Payment Time Case Study and Data Set. Develop a 700-word report including the following calculations and using the information to determine whether the new billing system has reduced the mean bill payment time:Assuming the standard deviation of the payment times for all payments is 4.2 days, construct a 95% confidence interval estimate to determine whether the new billing system was effective. State the interpretation of 95% confidence interval and state whether or not the billing system was effective.Using the 95% confidence interval, can we be 95% confident that µ ≤ 19.5 days?Using the 99% confidence interval, can we be 99% confident that µ ≤ 19.5 days?If the population mean payment time is 19.5 days, what is the probability of observing a sample mean payment time of 65 invoices less than or equal to 18.1077 days? Format your assignment consistent with APA format.
Case Study – Payment Time Case Study
QNT/561 Version 9
University of Phoenix Material
Case Study – Payment Time Case Study
Major consulting firms such as Accenture, Ernst & Young
Consulting, and Deloitte & Touche Consulting
employ statistical analysis to assess the effectiveness of
the systems they design for their customers. In
this case, a consulting firm has developed an electronic
billing system for a Stockton, CA, trucking
company. The system sends invoices electronically to each
customer’s computer and allows customers to
easily check and correct errors. It is hoped the new billing
system will substantially reduce the amount of
time it takes customers to make payments. Typical payment
times—measured from the date on an
invoice to the date payment is received—using the trucking
company’s old billing system had been 39
days or more. This exceeded the industry standard payment
time of 30 days.
The new billing system does not automatically compute the
payment time for each invoice because there
is no continuing need for this information. The management
consulting firm believes the new system will
reduce the mean bill payment time by more than 50 percent.
The mean payment time using the old billing
system was approximately equal to, but no less than, 39 days.
Therefore, if µ denotes the new mean
payment time, the consulting firm believes that µ will be
less than 19.5 days. Therefore, to assess the
system’s effectiveness (whether µ < 19.5 days), the
consulting firm selects a random sample of 65 invoices from the
7,823 invoices processed during the first three months of the new
system’s operation. Whereas this is the first time the consulting
company has installed an electronic billing system in a trucking
company, the firm has installed electronic billing systems in other
types of companies. Analysis of results from these other companies
show, although the population mean payment time varies from company
to company, the population standard deviation of payment times is
the same for different companies and equals 4.2 days. The payment
times for the 65 sample invoices are manually determined and are
given in the Excel® spreadsheet named “The Payment Time Case”. If
this sample can be used to establish that new billing system
substantially reduces payment times, the consulting firm plans to
market the system to other trucking firms. Copyright © 2017 by
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