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In most sampling plans, when a lot is rejected, the entire lot is inspected and all of
the defective items are replaced. Use of this replacement technique improves the
average outgoing quality in terms of percent defective. In fact, given (1) any
sampling plan that replaces all defective items encountered and (2) the true
incoming percent defective for the lot, it is possible to determine the average
outgoing quality (AOQ) in percent defective.
AOQ = (Pd )(Pa )(N-n ) /N
where
Pd = true percent defective of the lot
Pa = probability of accepting the lot
N = number of items in the lot
n = number of items in the sample
The AOQ curve and AOQL assume rejected lots are 100% inspected, and is only applicable to this
situation. They also assume the inspection is reasonably effective at removing defectives or defects (90%
effective or more).