This paper deals with the problem of determining the optimal inspection strategy for a multi-stage production process using simulation optimization. An optimal inspection strategy is the one that results in the lowest total inspection cost, while still assuring a required output quality. Because of the complexity of the problem, simulation is used to model the multi-stage process subject to inspection and to calculate the resulting inspection costs. Simulation optimization is then used to find the optimal inspection strategy. The performance of the proposed method is presented through the use of a numerical example.