Economic screening procedures using a correlated variable with multidecision alternatives

Do Sun Bai and Sung Hoon Hong

Naval Research Logistics (NRL), 1992, vol. 39, issue 4, 471-485

Abstract: Economic screening procedures using a correlated variable are developed for selecting markets in situations when there are several markets with different profit/ cost structures. It is assumed that the performance variable and the screening variable are jointly normally distributed. Profit models are constructed which involve three profit/cost components: profit from a conforming item, cost from an accepted nonconforming item, and screening inspection cost. Methods of finding the optimal screening procedures are presented and numerical examples are given.

Date: 1992
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https://doi.org/10.1002/1520-6750(199206)39:43.0.CO;2-I

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Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:39:y:1992:i:4:p:471-485

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