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Applied Sequential
Methodologies
STATISTICS: Textbooks and Monographs
D.B.Owen
Founding Editor, 1972-1991
Associate Editors
Editorial Board
Time Series
Sastry G. Pantula
North Carolina State University
1. The Generalized Jackknife Statistic, H. L. Gray and W. R. Schucany
2. Multivariate Analysis, Anant M. Kshirsagar
3. Statistics and Society, Walter T. Federer
4. Multivariate Analysis: A Selected and Abstracted Bibliography, 1957-1972, Kocher..
lakota Subrahmaniam and Kathleen Subrahmaniam
5. Design of Experiments: A Realistic Approach, Virgil L. Anderson and Robert A.
McLean
6. Statistical and Mathematical Aspects of Pollution Problems, John W Pratt
7. Introduction to Probability and Statistics (in two parts), Part I: Probability; Part II:
Statistics, Narayan C. Giri
8. Statistical Theory of the Analysis of Experimental Designs, J. Ogawa
9. Statistical Techniques in Simulation (in two parts), Jack P. C. Kleijnen
10. Data Quality Control and Editing, Joseph I. Naus
11. Cost of Living Index Numbers: Practice, Precision, and Theory, Kali S. Banerjee
12. Weighing Designs: For Chemistry, Medicine, Economics', Operations Research,
Statistics, Kali S. Banerjee
13. The Search for Oil: Some Statistical Methods and Techniques, edited by D. B. Owen
14. Sample Size Choice: Charts for Experiments with Linear Models, Robert E. Odeh and
Martin Fox
15. Statistical Methods for Engineers and Scientists, Robert M. Bethea, Benjamin S.
Duran, and Thomas L. Boullion
16. Statistical Quality Control Methods, Irving W BUff
17. On the History of Statistics and Probability, edited by D. B. Owen
18. Econometrics, Peter Schmidt
19. Sufficient Statistics: Selected Contributions, Vasant S. Huzurbazar (edited by Anant M.
Kshirsagar)
20. Handbook of Statistical Distributions, Jagdish K. Patel, C. H. Kapadia, and D. B. Owen
21. Case Studies in Sample Design, A. C. Rosander
22. Pocket Book of Statistical Tables, compiled by R. E. Odeh, D. B. Owen, Z. W
Birnbaum, and L. Fisher
23. The Information in Contingency Tables. D. V. Gokhale and Solomon Kullback
24. Statistical Analysis of Reliability and Life-Testing Models: Theory and Methods, Lee J.
Bain
25. Elementary Statistical Quality Control, Irving W BUff
26. An Introduction to Probability and Statistics Using BASIC. Richard A. Groeneveld
27. Basic Applied Statistics, B. L. Raktoe and J. J. Hubert
28. A Primer in Probability, Kathleen Subrahmaniam
29. Random Processes: A First Look, R. Syski
30. Regression Methods: A Tool for Data Analysis, Rudolf J. Freund and Paul D. Minton
31. Randomization Tests, Eugene S. Edgington
32. Tables for Normal Tolerance Limits, Sampling Plans and Screening, Robert E. Odeh
and D. B. Owen
33. Statistical Computing, William J. Kennedy, Jr., and James E. Gentle
34. Regression Analysis and Its Application: A Data-Oriented Approach, Richard F. Gunst
and Robert L. Mason
35. Scientific Strategies to Save Your Life. I. D. J. Bross
36. Statistics in the Pharmaceutical Industry, edited by C. Ralph Buncher and Jia-Yeong
Tsay
37. Sampling from a Finite Population, J. Hajek
38. Statistical Modeling Techniques, S. S. Shapiro and A. J. Gross
39. Statistical Theory and Inference in Research. T. A. Bancroft and C.-P. Han
40. Handbook of the Normal Distribution, Jagdish K. Patel and Campbell B. Read
41. Recent Advances in Regression Methods, Hrishikesh D. Vinod and Aman U/lah
42. Acceptance Sampling in Quality Control, Edward G. Schilling
43. The Randomized Clinical Trial and Therapeutic Decisions, edited by Niels Tygstrup,
John M Lachin, and Erik Juhl
44. Regression Analysis of Survival Data in Cancer Chemotherapy, Walter H. Carler, Jr.,
Galen L. Wampler, and Donald M. Stablein
45. A Course in Linear Models, Anant M. Kshirsagar
46. Clinical Trials: Issues and Approaches, edited by Stanley H. Shapiro and Thomas H.
Louis
47. Statistical Analysis of DNA Sequence Data, edited by B. S. Weir
48. Nonlinear Regression Modeling: A Unified Practical Approach, David A. Ratkowsky
49. Attribute Sampling Plans, Tables of Tests and Confidence Limits for Proportions, Rob-
erl E. Odeh and D. B. Owen
50. Experimental Design, Statistical Models, and Genetic Statistics, edited by Klaus
Hinkelmann
51. Statistical Methods for Cancer Studies, edited by Richard G. Cornell
52. Practical Statistical Sampling for Auditors, Arlhur J. Wilburn
53. Statistical Methods for Cancer Studies, edited by Edward J. Wegman and James G.
Smith
54. Self-Organizing Methods in Modeling: GMDH Type Algorithms, edited by Stanley J.
Farlow
55. Applied Factorial and Fractional Designs, Robert A. McLean and Virgil L. Anderson
56. Design of Experiments: Ranking and Selection, edited by Thomas J. Santner and Ajit
C. Tamhane
57. Statistical Methods for Engineers and Scientists: Second Edition, Revised and Ex-
panded, Robert M. Bethea, Benjamin S. Duran, and Thomas L. Boullion
58. Ensemble Modeling: Inference from Small-Scale Properties to Large-Scale Systems,
Alan E. Gelfand and Crayton C. Walker
59. Computer Modeling for Business and Industry, Bruce L. Bowennan and Richard T.
O'Connell
60. Bayesian Analysis of Linear Models, Lyle D. Broemeling
61. Methodological Issues for Health Care Surveys, Brenda Cox and Steven Cohen
62. Applied Regression Analysis and Experimental Design, Richard J. Brook and Gregory
C.Amold
63. Statpal: A Statistical Package for Microcomputers-PC-DOS Version for the IBM PC
and Compatibles, Bruce J. Chalmer and David G. Whitmore
64. Statpal: A Statistical Package for Microcomputers-Apple Version for the II, 11+, and
lie, David G. Whitmore and Bruce J. Chalmer
65. Nonparametric Statistical Inference: Second Edition, Revised and Expanded, Jean
Dickinson Gibbons
66. Design and Analysis of Experiments, Roger G. Petersen
67. Statistical Methods for Pharmaceutical Research Planning, Sten W. Bergman and
John C. Gittins
68. Goodness-of-Fit Techniques, edited by Ralph B. D'Agostino and Michael A. Stephens
69. Statistical Methods in Discrimination Litigation, edited by D. H. Kaye and Mikel Aickin
70. Truncated and Censored Samples from Normal Populations, Helmut Schneider
71. Robust Inference, M. L. Tiku, W. Y. Tan, and N. Balakrishnan
72. Statistical Image Processing and Graphics, edited by Edward J. Wegman and Douglas
J. DePriest
73. Assignment Methods in Combinatorial Data Analysis, Lawrence J. Huberl
74. Econometrics and Structural Change, Lyle D. Broemeling and Hiroki Tsurumi
75. Multivariate Interpretation of Clinical Laboratory Data, Adelin Albert and Eugene K.
Harris
76. Statistical Tools for Simulation Practitioners, Jack P. C. K1eijnen
77. Randomization Tests: Second Edition, Eugene S. Edgington
78. A Folio of Distributions: A Collection of Theoretical Quantile-Quantile Plots, Edward B.
Fowlkes
79. Applied Categorical Data Analysis, Daniel H. Freeman, Jr.
80. Seemingly Unrelated Regression Equations Models: Estimation and Inference, Viren-
dra K. Srivastava and David E. A. Giles
81. Response Surfaces: Designs and Analyses, Andre ./. Khuri and John A. Cornell
82. Nonlinear Parameter Estimation: An Integrated System in BASIC, John C. Nash and
Mary Walker-Smith
83. Cancer Modeling, edited by James R. Thompson and Barry W Brown
84. Mixture Models: Inference and Applications to Clustering, Geoffrey J. McLachlan and
Kaye E. Basford
85. Randomized Response: Theory and Techniques, Arijit Chaudhuri and Rahul Mukerjee
86. Biopharmaceutical Statistics for Drug Development, edited by Kart E. Peace
87. Parts per Million Values for Estimating Quality Levels, Robert E. Odeh and D. B. Owen
88. Lognormal Distributions: Theory and Applications, edited by Edwin L. Crow and Kunio
Shimizu
89. Properties of Estimators for the Gamma Distribution, K. O. Bowman and L. R. Shenton
90. Spline Smoothing and Nonparametric Regression, Randall L. Eubank
91. Linear Least Squares Computations, R. W Farebrother
92. Exploring Statistics, Damaraju Raghavarao
93. Applied Time Series Analysis for Business and Economic Forecasting, Sufi M. Nazem
94. Bayesian Analysis of Time Series and Dynamic Models, edited by James C. Spall
95. The Inverse Gaussian Distribution: Theory, Methodology, and Applications, Raj S.
Chhikara and J. Leroy Folks
96. Parameter Estimation in Reliability and Life Span Models, A. Clifford Cohen and Betty
Jones Whitten
97. Pooled Cross-Sectional and Time Series Data Analysis, Terry E. Die/man
98. Random Processes: A First Look, Second Edition, Revised and Expanded, R. Syski
99. Generalized Poisson Distributions: Properties and Applications, P. C. Consul
100. Nonlinear lp-Norm Estimation, Rene Gonin and Arthur H. Money
101. Model Discrimination for Nonlinear Regression Models, Dale S. Borowiak
102. Applied Regression Analysis in Econometrics, Howard E. Doran
103. Continued Fractions in Statistical Applications, K. O. Bowman find L. R. Shenton
104. Statistical Methodology in the Pharmaceutical Sciences, Donald A. Berry
105. Experimental Design in Biotechnology, Perry D. Haaland
106. Statistical Issues in Drug Research and Development, edited by Karl E. Peace
107. Handbook of Nonlinear Regression Models, David A. Ratkowsky
108. Robust Regression: Analysis and Applications, edited by Kenneth D. Lawrence and
Jeffrey L. Arthur
109. Statistical Design and Analysis of Industrial Experiments, edited by Subir Ghosh
110. U-Statistics: Theory and Practice, A. J. Lee '
111. A Primer in Probability: Second Edition, Revised and Expanded, Kathleen Subrah-
man;am
112. Data Quality Control: Theory and Pragmatics, edited by Gunar E. Liepins and V. R. R.
Uppuluri
113. Engineering Quality by Design: Interpreting the Taguchi Approach, Thomas B. Barker
114. Survivorship Analysis for Clinical Studies, Eugene K. Harris and Adelin Albert
115. Statistical Analysis of Reliability and Life-Testing Models: Second Edition, Lee J. Bain
and Max Engelhardt
116. Stochastic Models of Carcinogenesis, Wai-Yuan Tan
117. Statistics and Society: Data Collection and Interpretation, Second Edition, Revised and
Expanded, Walter T. Federer
118. Handbook of Sequential Analysis, B. K. Ghosh and P. K. Sen
119. Truncated and Censored Samples: Theory and Applications, A. Clifford Cohen
120. Survey Sampling Principles, E. K. Foreman
121. Applied Engineering Statistics, Robert M. Bethea and R. Russell Rhinehart
122. Sample Size Choice: Charts for Experiments with Linear Models: Second Edition,
Robert E. Odeh and Martin Fox
123. Handbook of the Logistic Distribution, edited by N. Balakrishnan
124. Fundamentals of Biostatisticallnference, Chap T. Le
125. Correspondence Analysis Handbook, J.-P. Benzecri
126. Quadratic Forms in Random Variables: Theory and Applications, A. M. Mathai and
Serge B. Provost
127. Confidence Intervals on Variance Components, Richard K. Burdick and Franklin A.
Graybill
128. Biopharmaceutical Sequential Statistical Applications, edited by Karl E. Peace
129. Item Response Theory: Parameter Estimation Techniques, Frank B. Baker
130. Survey Sampling: Theory and Methods, Arijit Chaudhuri and Horst Stenger
131. Nonparametric Statistical Inference: Third Edition, Revised and Expanded, Jean Dick-
inson Gibbons and Subhabrata Chakraborli
132. Bivariate Discrete Distribution, Subrahmaniam Kocherlakota and Kathleen Kocher-
lakota
133. Design and Analysis of Bioavailability and Bioequivalence Studies, Shein-Chung Chow
and Jen-pei Liu
134. Multiple Comparisons, Selection, and Applications in Biometry, edited by Fred M.
Hoppe
135. Cross-Over Experiments: Design, Analysis, and Application, David A. Ratkowsky,
Marc A. Evans, and J. Richard Alldredge
136. Introduction to Probability and Statistics: Second Edition, Revised and Expanded,
Narayan C. Giri
137. Applied Analysis of Variance in Behavioral Science, edited by Lynne K. Edwards
138. Drug Safety Assessment in Clinical Trials, edited by Gene S. Gilbert
139. Design of Experiments: A No-Name Approach, Thomas J. Lorenzen and Virgil L. An-
derson
140. Statistics in the Pharmaceutical Industry: Second Edition, Revised and Expanded,
edited by C. Ralph Buncher and Jia-Yeong Tsay
141. Advanced Linear Models: Theory and Applications, Song~Gui Wang and Shein-Chung
Chow
142. Multistage Selection and Ranking Procedures: Second-Order Asymptotics, Nitis Muk-
hopadhyayand Tumulesh K. S. Solanky
143. Statistical Design and Analysis in Pharmaceutical Science: Validation, Process Con-
trols, and Stability, Shein-Chung Chow and Jen-pei Liu
144. Statistical Methods for Engineers and Scientists: Third Edition, Revised and Expanded,
Robert M. Bethea, Benjamin S. Duran, and Thomas L. Boullion
145. Growth Curves, Anant M. Kshirsagar and William Boyce Smith
146. Statistical Bases of Reference Values in Laboratory Medicine, Eugene K. Harris and
James C. Boya
147. Randomization Tests: Third Edition, Revised and Expanded, Eugene S. Edgington
148. Practical Sampling Techniques: Second Edition, Revised and Expanded, Ranjan K.
Som
149. Multivariate Statistical Analysis, Narayan C. Giri
150. Handbook of the Normal Distribution: Second Edition, Revised and Expanded, Jagdish
K. Patel and Campbell B. Read
151. Bayesian Biostatistics, edited by Donald A. Berry and Da/ene K. Stangl
152. Response Surfaces: Designs and Analyses, Second Edition, Revised and Expanded,
Andre I. Khuri and John A. Cornell
153. Statistics of Quality, edited by Subir Ghosh, William R. SChucany, and William B. Smith
154. Linear and Nonlinear Models for the Analysis of Repeated Measurements, Edward F.
Vonesh and Vernon M. Chinchilli
155. Handbook of Applied Economic Statistics, Aman Ullah and David E. A. Giles
156. Improving Efficiency by Shrinkage: The James-Stein and Ridge Regression Estima-
tors, Marvin H. J. Gruber
157. Nonparametric Regression and Spline Smoothing: Second Edition, Randall L. Eu-
bank
158. Asymptotics, Nonparametrics, and Time Series, edited by Subir Ghosh
159. Multivariate Analysis, Design of Experiments, and Survey Sampling, edited by Subir
Ghosh
160. Statistical Process Monitoring and Control, edited by Sung H. Park and G. Geoffrey
Vining
161. Statistics for the 21st Century: Methodologies for Applications of the Future, edited
by C. R. Rao and Gabor J. Szekely
162. Probability and Statistical Inference, Nitis Mukhopadhyay
163. Handbook of Stochastic Analysis and Applications, edited by D. Kannan and V. Lak-
shmikantham
164. Testing for Normality, Henry C. Thode, Jr.
165. Handbook of Applied Econometrics and Statistical Inference, edited by Aman Ullah,
Alan T. K. Wan, and Anoop Chaturvedi
166. Visualizing Statistical Models and Concepts, R. W Farebrother
167. Financial and Actuarial Statistics: An Introduction, Dale S. Borowiak
168. Nonparametric Statistical Inference: Fourth Edition, Revised and Expanded, Jean
Dickinson Gibbons and Subhabrata Chakraborti
169. Computer-Aided Econometrics, edited by David E. A. Giles
170. The EM Algorithm and Related Statistical Models, edited by Michiko Watanabe and
Kazunori Yamaguchi
171. Multivariate Statistical Analysis: Second Edition, Revised and Expanded, Narayan C.
Giri
172. Computational Methods in Statistics and Econometrics, Hisashi Tanizaki
173. Applied Sequential Methodologies: Real-World Examples with Data Analysis, edited by
Nitis Mukhopadhyay, Sujay Datta, and Saibal Chattopadhyay
Suiay Datta
Northern Michigan University
Marquette, Michigan, U.S.A.
Saibal Chattopadhyay
Indian Insitute ofManagement
Calcutta, India
MARCEL
Although great care has been taken to provide accurate and current information, neither the
author(s) nor the publisher, nor anyone else associated with this publication, shall be liable
for any loss, damage, or liability directly or indirectly caused or alleged to be caused by this
book. The material contained herein is not intended to provide specific advice or recom-
mendations for any specific situation.
ISBN: 0-8247-5395-X
Headquarters
Marcel Dekker, Inc., 270 Madison Avenue, New York, NY 10016, U.S.A.
tel: 212-696-9000; fax: 212-685-4540
The publisher offers discounts on this book when ordered in bulk quantities. For more infor-
mation, write to Special SaleslProfessional Marketing at the headquarters address above.
Neither this book nor any part may be reproduced or transmitted in any form or by any
means, electronic or mechanical, including photocopying, microfilming, and recording, or
by any information storage and retrieval system, without permission in writing from the
publisher.
10 9 8 7 6 5 4 3 2
In celebration of the brilliant career of Profe$sor Anis
Mul~hopadhyay, my elder brother and teacher, and in recognition of
his recent retirement from the Indian Statistical Institute, Calcutta,
this volume is presented to him with love and affection,
Nitis Mukhopadhyay
Sujay Datta
Saibal Chattopadhyay
To those colleagues who most l~indly offered to help and freely
shared their expertise and vision at various junctures of editing this
volume, the Co-Editors express their sincerest gratitude and
appreciation.
Many colleagues helped tremendously in the editorial process
by diligently sharing the burden of refereeing one or more articles.
What a difference each individual has made! The Co-Editors thanl~
each referee for showing unselfish dedication and unmistal~able
enthusiasm.
Bechhofer, R.E., Santner, T.J. and Goldsman, D.M. (1995). Design and
Analysis of Experiments for Statistical Selection, Screening, and
Multiple Comparisons. Wiley: New York.
Gibbons, J.D., atkin, I. and Sobel, M. (1977). Selecting and Ordering
Populations. Wiley: New York.
Gupta, S.S. and Panchapakesan, S. (1979). Multiple Decision Theory.
Wiley: New York. .
Rao, C.R. (1973). Linear Statistical Inference, 2nd ed. Wiley: New York.
Zacks, s. (1971). The Theory ofStatistical Inference. Wiley: New York.
Wald's monograph was unique in its style in 1947 and in many ways
it still remains unique largely because WaId's elegantly original mathematical
and statistical contributions played a fundamental role in solving practical
problems of real-life importance at the time. We sunnise, however, that over
the years these other volumes have pointed more toward theoretical
advancements. Directly or indirectly, purely theoretical contributions have
received more encouragement from many quarters and hence the theory of
sequential analysis has indeed become very rich. Unfortunately, at the same
time, real applications have taken serious hits.
Weare personally convinced that this field can and should interface
with every conceivable applied area of statistics. But since this field has not
been accessible to practitioners for widespread real-world applications, we
believe that its popularity among statisticians has dwindled. Real-life
experimental data are rarely presented or discussed in sequential books and
journal articles. This frustrating situation amounting to what may be viewed
as a 'death sentence' has developed over many decades and sadly, this
otherwise attractive field with such great promise has alienated itself nearly
completely from most practitioners in statistical sciences.
One notable exception, in our view, is the area ofclinical trials which
has continued to be the major beneficiary of some of the basic research in
sequential methodologies. Again, we cite some influential volumes in this
area:
Nitis Mukhopadhyay
SujayDatta
Saibal Chattopadhyay
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