Note---Optimal Inspection Policy in Sequential Screening

June S. Park, Michael H. Peters and Kwei Tang
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June S. Park: Department of Management Sciences, The University of Iowa, Iowa City, Iowa 52242
Michael H. Peters: Department of Quantitative Business Analysis, Louisiana State University, Baton Rouge, Louisiana 70803
Kwei Tang: Department of Quantitative Business Analysis, Louisiana State University, Baton Rouge, Louisiana 70803

Management Science, 1991, vol. 37, issue 8, 1058-1061

Abstract: Under sequential screening, a production lot is inspected item-by-item; the decision is made after inspecting each item whether to inspect another item or to reject the remainder of the lot; and thus uninspected items are never accepted. This screening process is a special case of the sequential sampling considered in Wortham and Wilson (1971). The process is formulated as an optimal stopping problem using a Bayesian approach. Based on an analysis of the structural properties of the optimal policy, a backward-recursive optimal algorithm, which is more efficient than the existing algorithm for optimal sequential sampling, is developed.

Keywords: sequential screening; optimal stopping; Bayesian sequential decision process; dynamic programming (search for similar items in EconPapers)
Date: 1991
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