Economic screening procedures in logistic and normal models

Economic screening procedures based on a continuous screenign variable X in place of a dichotomous performance variable T are presented. Optimal critical values on the screening variable minimizing the expected cost are obtained for two models; it is assumed that X given T is normally distributed in normal model and P[T=1•X] is a logistic function of X in the logistic model, and that costs are incurred by screening inspection and misclassification errors. Cases where some parameters are unknown are also considered.