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Payment Time Case QNT/561 |VERIFIED ANSWERS
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PAYMENT TIME CASE 1Payment Time Case
QNT/561
13 February 2018
, PAYMENT TIME CASE 2
Payment Time Case
A consulting firm developed an electronic billing system for a trucking company in
Stockton, CA. This consulting firm was tasked to reduce the amount of time it takes customers to
make payments. The previous billing system averaged 39 days or more to receive a payment and
was determined that is unacceptable. The consulting firm randomly pulls 65 invoices from a
population of 7,823 to determine if the new billing system can reduce the billing time to half of
the current 39 day average down to 19.5 days.
Requirements
o 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.
Figure 1. Payment Time Case (Source: Payment_Time_Case_.xlsx, University of Phoenix)
The new payment time using the new billing system required an average of 19.5 days to be
considered. According to Figure 1 it can be concluded that we are 95% confident that the
payment time of customers in Stockton, CA using the new billing system is between 17.0867 to
19.1287 days.
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