Empirical Bayes Based on Squared Error Loss and Precautionary Loss Functions in Sequential Sampling Plan

Abstract

An acceptance sampling plans are statistical tools in quality control which often used for lot inspection in several areas such as industry, engineering and business. It can be applied for preserving the quality of products in industry process and preserving the producer’s risk and consumer’s risk in the production process of manufactures. The objective of this study is to utilize the Empirical Bayes approach based on squared error loss and precautionary loss functions for parameter estimation in sequential sampling plans. The parameters are estimated using Lindley’s approximation technique, and hyper-parameters can be obtained via Gibbs sampling technique. Data are normally distributed under an unknown mean and variance. The proposed plans are compared with traditional approaches including a single sampling plan and sequential sampling plan. The probability of acceptance ( $P_{a}$ ) and average sample number (ASN) are used as criterion for comparison. Results show that the proposed plans yielded the smaller ASN and higher $P_{a}$ than both classical methods.

Keywords

• Empirical Bayes
• sequential sampling plan
• single sampling plan
• squared error loss function
• precautionary loss function