Letter to the Editor—A Criterion for the Economic Application of Imperfect Inspections

Published Online:https://doi.org/10.1287/opre.16.3.695

A decision rule is developed, based on the associated penalty costs and the likelihood of successfully detecting an existing failure, to determine whether or not an inspection policy is economically of value. Necessary and sufficient conditions are developed if the failure distribution is known explicitly, whereas a sufficient condition is given if it is known only that the mechanism experiences “wearout.”

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