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. Copyright © 2016 Taylor & Francis Group, LLC.
|Early online date||Sept 2016|
|Publication status||Published - 2016|
CitationLam, Y., Choy, B., & Yu, P. (2016). A sequential sampling plan for exponential distribution. Sequential Analysis, 35(3), 331-346. doi: 10.1080/07474946.2016.1165523
- Backward induction
- Markov decision process
- Optimality equation
- Sequential sampling plan