Every Check Cashed or Deposited at Lincoln Bank Must Be

Essay

Every check cashed or deposited at Lincoln Bank must be encoded with the amount of the check before it can begin the Federal Reserve clearing process. The accuracy of the check encoding process is of utmost importance. If there is any discrepancy between the amount a check is made out for and the encoded amount, the check is defective.Twenty samples, each consisting of 250 checks, were selected and examined. The number of defective checks found in each sample is shown below. The manager of the check encoding department knows from past experience that when the encoding process is in control, an average of 1.6% of the encoded checks are defective.
a. Determine the center line and the 3-sigma control limits for the p chart.
b. Plot the twenty recent sample findings on the chart and decide if the check encoding operation is in control.