PRACTICAL MEANING OF THE BAYESIAN DECISION MAKING APPROACH TO ACCEPTANCE SAMPLING.

Decision rules in acceptance sampling of large lots may be altered when, due to changing economic conditions, the Bayesian incorporation of the new economic pay-offs with the information contained in the sample shows that the expected values provided by the courses of action ″accept the lot″ and ″reject the lot″ call for a different action. This paper shows that the required Bayesian decision making process and decision rule necessitated by the new economic conditions can be reduced in complexity and may be expressed in terms of equivalent acceptance sampling plans. Thus, the change in the economic conditions can be stated and analyzed in terms of change in the statistical parameters needed to define an acceptance sampling plan.