In this essay, we describe the construction and use of the Cut-Score Operating Function in aiding standard setting decisions. The Cut-Score Operating Function shows the relation between the cut-score chosen and the consequent error rate. It allows error rates to be defined by multiple loss functions and will show the behavior of each loss…

David Thissen, a professor in the Department of Psychology and Neuroscience, Quantitative Program at the University of North Carolina, has consulted and served on technical advisory committees for assessment programs that use item response theory (IRT) over the past couple decades. He has come to the conclusion that there are usually two purposes…