Designing a variable sampling plan based on Taguchi's loss function

This paper discusses the problem of designing a new variable sampling plan. Suppose that the lot quality characteristic obeys an exponential distribution. Adopting Taguchi's loss function, the objective is to design a plan under which the producer's risk of rejecting a lot that has a specified average loss per item is no greater than alpha, and the consumer's risk of accepting a lot that has a specified average loss per item is no greater than beta. The method of designing this plan is an extension of the method used by Derman and Ross.