Based on Prior Distributions and Costs

The interpretation of the six cost parameters depends on the kind of Inspection envisaged; i.e. whether Inspection is a consumer's receiving inspection; a producer's inspection of finished goods, or "Internal inspection" by delivery of goods from one department to another within the same firm. The cost parameters may have quite different values when considered exclusively from a producer's or a consumer's point of view because certain costs are borne primarily by one of the parties Involved. The values of the cost parameters also depend on whether the Inspection is rectifying or non-rectifying, destructive or non-destructive. In the following the two cost expressions are discussed and a few examples of interpretation are given.