. Both nonprofit and for-profit hospitals are financially pressed by restrictions on reimbursement by insurers and the government. One hospital looked at their losses broken down by diagnosis. The leading source was joint replacement surgery. Table 12.4 gives data on the losses (in dollars) incurred by this hospital in treating major joint replacement patients.3 The hospital has taken from its records a random sample of 8 such patients each month for 15 months.

(a) Calculate x and s for the first 2 subgroups to verify the table entries.

(b) Make an s control chart using center lines and limits calculated from these past data. There are no points out of control.

(c) Because the s chart is in control, base the x chart on all 15 samples. Make this chart. Is it also in control?


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