This paper considers the problem of container inspection at a port-of-entry. Containers are inspected through a specific sequence to detect the presence of nuclear materials, biological and chemical agents, and other illegal shipments. The threshold levels of sensors at inspection stations of the port-of-entry affect the probabilities of incorrectly accepting or rejecting a container. In this paper, we present several optimization approaches for determining the optimum sensor threshold levels, while considering misclassification errors, total cost of inspection, and budget constraints. In contrast to previous work which determines threshold levels and sequence separately, we consider an integrated system and determine them simultaneously. Examples applying the approaches in different sensor arrangements are demonstrated.
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