Due to the rapid growth in automated testing and manufacturing systems, screening inspection becomes very attractive. In this paper, we investigate the effects of limited capacity on screening inspection using a surrogate variable. The model is developed under the assumption that the reprocessed and nonreprocessed items are produced by the same manufacturing process and therefore their quality characteristics are independently and identically distributed. Profit models are constructed which involve four price/cost components; selling price, cost incurred by imperfect quality, reprocessing and quality inspection costs. Methods of finding the optimal screening limits are presented, and a numerical example is given. Sensitivity analyses are also performed to study the effect of a process standard deviation on this model.