An Approximate Dynamic Programming Approach for Computing Base Stock Levels

Hong-zhi He ()
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Hong-zhi He: Luoyang Institute of Science and Technology

Chapter Chapter 79 in The 19th International Conference on Industrial Engineering and Engineering Management, 2013, pp 749-757 from Springer

Abstract: Abstract This paper studies the classical model for stochastic inventory control, i.e. a finite horizon periodic review model without setup costs. A base-stock policy is well known to be optimal for such systems. The author gives a new heuristic computation procedure for calculating the base-stock levels. The idea is based on approximate dynamic programming. A numerical example is provided to serve as an illustration.

Keywords: Approximate dynamic programming; Base-stock policy; Stochastic inventory control (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-38391-5_79

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DOI: 10.1007/978-3-642-38391-5_79

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