Minimum cost sampling plans using bayesian methods

Abstract
This article considers a general method for acceptance/rejection decisions in lot‐by‐lot sampling situations. Given arbitrary cost functions for sampling, accepting, and rejecting (where the cost can depend on the quality of the item) and a prior distribution on supplier quality, formulas are derived that lead to the minimal cost single‐staged inspection plan. For the Bernoulli case, where each item is classified as acceptable or defective, the formulas simplify immensely. A computer code for solving the Bernoulli case is given.

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