Economic selection of a process level under acceptance sampling by variables

The economic impact of the choice of process level for an industrial process depends on both internal and external conditions. The paper considers production costs and process variability as internal conditions and prices and control plan as external ones. It derives, when the control plan is given as a tolerance interval, e.g. MIL-STD-414 B, the exact and the approximate optimal process level and the exact and the approximate optimal expected net income per lot. The paper assumes that the cost and price functions are linear, and that the quality characteristic is normally distributed. An industrial example is discussed.