The economic efficiency and safety of any power plant depends on the proper functioning of its component systems. The functioning of such systems (e.g., piping) is evaluated through performance of periodic nondestructive examinations (NDE). The results of these examinations determine actions the power plant owner must take regarding inspected components. If a component is found malfunctioning or containing a defect, the owner may decide to repair or replace the component. If the results of NDE indicates that the component is functioning as it should or is defect-free, he would most certainly take no action but to record such a finding for future reference. Any action the owner takes, though, depends on NDE results and involves risks associated with either not identifying defective components or mislabeling components defective when they are not. Nuclear power plants, because of their unique circumstances, must pay costs for these types of errors that far exceed those in other industries. This paper depicts the framework for relating inspection capability to the economics of power plant operation.