OPTIMAL SCHEDULING OF FALLIBLE INSPECTIONS

This paper gives the exact optimal solution to the problem of designin g inspection schedules with fallible and time-consuming test procedure s. The optimality criterion is designed to achieve a balance between t he cost of inspections and the cost of undetected failure. The solutio n is derived in continuous time, with arbitrary failure distribution, and is based on infinite-horizon dynamic programming with time-depende nt utilities, and with an additional optimization with respect to init ial conditions. Results include uniqueness and monotonicity properties of the optimal solution, as well as computational algorithms.