Quadratic Approximation of Cost Functions in Lost Sales and Perishable Inventory Control Problems
نویسندگان
چکیده
We propose an approximation scheme for two important but difficult single-product inventory systems, specifically, the lost-sales system and the perishable product system. The approach is based on quadratic approximations of cost-to-go functions within the framework of Approximate Dynamic Programming via Linear Programming. We propose heuristics and evaluate their performance against existing heuristics. Numerical results show promise in our approach.
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