AN INFORMATION VALUE APPROACH TO QUALITY CONTROL

Abstract

Quality Control sampling plans are normally chosen by using industrial and military standards. These standards do not involve economic considerations, and usually fail to meet cost considerations. The Information Economic approach presented in this paper suggests an easy to use methodology which determines the optimal plan for a given situation of a quality control Common quality control attributes like, AQL, LTPD, Operating Characteristics Curves and Quality Control Plans are shown as special cases of Information Economic Models. Theorems involving dominance among various of Quality Control plans are proved. The Blackwell Theorem on the relationship "Generally More Informative” is modified to accommodate to the Quality Control case. The major results of the paper include new algorithm to optimize the expected utility of decision makers. The value of information in Quality Control systems is assessed, and cost/effective analysis is carried out.