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Application of average dynamic programming to inventory systems

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  • Oscar Vega-Amaya
  • Raúl Montes-de-Oca

Abstract

We show the existence ofaverage cost (AC-) optimal policy for an inventory system withuncountable state space; in fact, the AC-optimal cost and an AC-optimal stationary policy areexplicitly computed. In order to do this, we use a variant of thevanishing discount factor approach, which have been intensively studied in recent years but the available results not cover the inventory problem we are interested in. Copyright Physica-Verlag 1998

Suggested Citation

  • Oscar Vega-Amaya & Raúl Montes-de-Oca, 1998. "Application of average dynamic programming to inventory systems," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 47(3), pages 451-471, October.
    • Handle: RePEc:spr:mathme:v:47:y:1998:i:3:p:451-471
    DOI: 10.1007/BF01198405
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    References listed on IDEAS

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    1. Linn I. Sennott, 1989. "Average Cost Optimal Stationary Policies in Infinite State Markov Decision Processes with Unbounded Costs," Operations Research, INFORMS, vol. 37(4), pages 626-633, August.
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    Cited by:

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    2. Armando Mendoza-Pérez & Onésimo Hernández-Lerma, 2010. "Markov control processes with pathwise constraints," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 71(3), pages 477-502, June.

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