The Single-period Cost Variance Investigation Decision

Abstract

1. In dealing with this problem it is first necessary to establish some terminology. Let:

S 1	represent the situation in which the process is in control
S 2	represent the situation in which the process is out of control
a 1	represent the act of ordering a full drain
a 2	represent the act of ordering a partial drain
a 3	represent the act of ordering no drain at all