INTERNATIONAL JOURNAL OF ENGINEERING, SCIENCE AND - Volume 7, Issue 4, April 2018

Pages: 134-152

Date of Publication: 09-Apr-2018

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MODELS OF INVENTORY PROBLEM

Author: Bikram Kumar

Category: Engineering, Science and Mathematics

Abstract:

In this paper, three different models, namely Markov Chain, Dynamic Programming and Markov Sequential Decision Processes, are used to solve an inventory problem based on the periodic review system. We show how the three models converge to the same (s, S) policy and we provide a numerical example to illustrate such a convergence. The paper leads to explain how a solution is obtained by each of the three models and how the three solutions are equivalent even though they look quite different.