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From Elsmar Cove Quality Assurance and Business Standards Wiki
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Mainly with regard to manufacturing: The examination of a part to determine if it conforms to specifications.

(1) Functional Inspection: Testing products in real or simulated conditions to see whether they work as intended.
(2) Mass (100%) Inspection: Looking at all products to screen out those that may be defective.
(3) Sampling Inspection: Looking at a fraction (a sample) of all the output to determine disposition of that output.

Alternate definitions for Inspection:

In the aviation field, the instructions will usually be more specific, such as Visual Inspection or Non-Destructive Testing. It could mean to verify the torque on bolts using a calibrated torque wrench.

Critical appraisal involving examination, measurement, testing, gauging, and comparison of materials or items. An inspection determines if the material or item is in proper quantity and condition, and if it conforms to the applicable or specified requirements. Inspection is generally divided into three categories:
(1) Receiving inspection,
(2) In-process inspection, and
(3) Final inspection. In quality control (which is guided by the principle that "Quality cannot be inspected into a product") the role of inspection is to verify and validate the variance data; it does not involve separating the good from the bad.