A Two-sided Screening Procedure Using Several Correlated Variables

Abstract

When inspection on the performance variable of interest is destructive or costly, it is attractive to use other variables which are correlated with the performance variable and which are inexpensive to inspect as the screening variables. The idea of using a single correlated variable in a complete screening procedure has drawn much attention recently. In this paper, we extend a previously defined economic model for a screening procedure using more than one correlated variable. The screening specifications are based on a linear combination of the correlated variables, and. if an item fails to conform to the screening specifications, it is rejected and excluded from shipment. The screening specifications are determined so that the total cost, the sum of three components, is minimized.