A sequential sampling plan for exponential distribution. Issue 3 (2nd July 2016)

• Record Type: Journal Article
• Authors: Lam, Yeh; Choy, Boris; Yu, Philip
• Is Part Of: Sequential analysis. Volume 35:Issue 3(2016)
• Page Start: 331
• Page End: 346
• Publication Date: 2016-07-02
• Subjects: Backward induction -- Markov decision process -- optimality equation -- sequential sampling plan; 62D05 -- 62F15 -- 62L15 -- 62L99; Sequential analysis -- Periodicals; 519.54
• DOI: 10.1080/07474946.2016.1165523
• Languages: English
• ISSNs: 0747-4946

Abstract

ABSTRACT: In this article, a sequential variable sampling plan is studied. Suppose that the quality of an item in a batch is measured by a random variable with exponential distribution; its parameter is unknown having a gamma prior distribution. Then by using Bayesian approach and considering a Markov decision process, the optimality equations for the minimum total expected cost are formulated. We show that an optimal decision rule will have a control limit structure and monotonicity. A backward induction method is suggested that is a finite algorithm for the numerical solution of the sequential sampling plan.