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An economic two‐stage screening procedure with a prescribed outgoing quality in logistic and normal models

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  • Do Sun Bai
  • Hyuck Moo Kwon
  • Min Koo Lee

Abstract

An economic two‐stage screening procedure based on a dichotomous performance variable T and a continuous screening variable X is proposed. X is measured first to decide whether an item should be accepted, rejected, or additional observations should be taken. If no terminal decision is reached, T is then observed to classify the undecided items. Two models are considered; (i) the logistic model, where P(T = 1|X = x) is assumed to be a logistic function of x, and (ii) the normal model, where X given T is assumed to be normally distributed. A simple economic model based on inspection and misclassification costs is constructed. Optimal cutoff values on the screening variable are obtained by minimizing the expected cost subject to the constraint that the average outgoing quality attains a pre‐specified level. Solutions are provided for both known‐parameter and unknown‐parameter cases. © 1995 John Wiley & Sons, Inc.

Suggested Citation

  • Do Sun Bai & Hyuck Moo Kwon & Min Koo Lee, 1995. "An economic two‐stage screening procedure with a prescribed outgoing quality in logistic and normal models," Naval Research Logistics (NRL), John Wiley & Sons, vol. 42(7), pages 1081-1097, October.
    • Handle: RePEc:wly:navres:v:42:y:1995:i:7:p:1081-1097
    DOI: 10.1002/1520-6750(199510)42:73.0.CO;2-X
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    References listed on IDEAS

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    1. Do Sun Bai & Sung Hoon Hong, 1992. "Economic screening procedures using a correlated variable with multidecision alternatives," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(4), pages 471-485, June.
    2. Do Bai & Sang Kim & Moon Riew, 1990. "Economic screening procedures based on correlated variables," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 37(1), pages 263-280, December.
    3. Do Bai & Min Lee, 1993. "Economic designs of single and double screening procedures," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 40(1), pages 95-113, December.
    4. Kwei Tang, 1988. "Design of a two‐stage screening procedure using correlated variables: A loss function approach," Naval Research Logistics (NRL), John Wiley & Sons, vol. 35(5), pages 513-533, October.
    5. Herbert Moskowitz & Hsien-Tang Tsai, 1988. "A One-Sided Double Screening Procedure Using Individual Unit Misclassification Error," Management Science, INFORMS, vol. 34(9), pages 1139-1153, September.
    6. Moskowitz, Herbert & Plante, Robert & Tsai, Hsien-Tang, 1991. "Single-sided economic screening models incorporating individual unit misclassification error and risk preference," European Journal of Operational Research, Elsevier, vol. 53(2), pages 228-243, July.
    7. Sang Boo Kim & Do Sun Bai, 1990. "Economic screening procedures in logistic and normal models," Naval Research Logistics (NRL), John Wiley & Sons, vol. 37(6), pages 919-928, December.
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    Cited by:

    1. R. J. Boys & K. D. Glazebrook & D. J. Laws, 1996. "A class of Bayes‐optimal two‐stage screens," Naval Research Logistics (NRL), John Wiley & Sons, vol. 43(8), pages 1109-1125, December.
    2. Costa, Antonio F. B. & De Magalhaes, Maysa S., 2005. "Economic design of two-stage charts: The Markov chain approach," International Journal of Production Economics, Elsevier, vol. 95(1), pages 9-20, January.
    3. Lee, Min Koo & Elsayed, Elsayed A., 2002. "Process mean and screening limits for filling processes under two-stage screening procedure," European Journal of Operational Research, Elsevier, vol. 138(1), pages 118-126, April.
    4. Lee, Min Koo & Jang, Joong Soon, 1997. "The optimum target values for a production process with three-class screening," International Journal of Production Economics, Elsevier, vol. 49(2), pages 91-99, April.

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