Description
Discussion Topic Assignment:
Imagine that you are a business manager for a mid-sized company. Propose one (1) overall strategy to build an effective business model in order to both monitor / control changes in business process and predict future business performance for your company. Provide a rationale (e.g., verification process) for your response.
Homework Assignment 6
Due Sunday. Lecture notes and Homework calculations files are attach below.
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 | |||
Week | Elapsed Time | Week | Elapsed Time | |
1 | 31.7 | 13 | 24 | |
2 | 27 | 14 | 25.8 | |
3 | 33.8 | 15 | 31 | |
4 | 30 | 16 | 23.5 | |
5 | 32.5 | 17 | 28.5 | |
6 | 33.5 | 18 | 25.6 | |
7 | 38.2 | 19 | 28.7 | |
8 | 37.5 | 20 | 27.4 | |
9 | 29 | 21 | 28.5 | |
10 | 31.3 | 22 | 25.2 | |
11 | 38.6 | 23 | 24.5 | |
12 | 39.3 | 24 | 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.)
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Explanation & Answer
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An overall strategy to build an effective business
One common strategy that many companies use to predict their future is considering the
momentum of the company. The companies make use of a lot of analytics and tons of algorithms
to predict the future of the business. Personally I would recommend finding out what algorithms
would best help determine the success and growth or production of a company in order to
measure the momentum of the company; even though algorithms are not excellent. The best
algorithm should compare two parameters and provide a line of best fit. This can guide the
current business changes. Extrapolation of the line of best fit should give a rough ideal of future
trends if the parameters change co...