Econometrica: Apr 1962, Volume 30, Issue 2

Note on Program Uncertainty in the Dynamic Programming Problem

https://doi.org/0012-9682(196204)30:2<336:NOPUIT>2.0.CO;2-B
p. 336-342

Richard C. Kao

In this note we study the dynamic inventory problem for a follow-on provisioning in which the program length is subject to uncertainty with a known distribution. It is shown that under rather general cost conditions, the optimal policy is of the (S, s) type. This is true whether or not there exists a time lag in delivery provided that excess demand is always backlogged. The case of an infinite program horizon is also briefly discussed.
Institutional Access
Log In To View Full Content

Back