Abstract
A model for the economic design of an np-control system integrated within a multiple stage serial production process is presented. The total expected quality control cost includes the costs of sampling, the costs of investigating an out-of-control alarm and possibly correcting an assignable cause(s), and the costs associated with the production of non-conforming items. The model is represented as a directed network with decision variables of sample size, rejection number and frequency of sampling occurring at each stage of the process. A combination of dynamic programming and direct search techniques is applied to determine the set of sampling policies which yield minimum total expected cost. Numerical examples and results of a sensitivity analysis are reported.
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