In this paper, we use stochastic dynamic programming to model the choice of a municipality which has to design an optimal waste management program under uncertainty about the price of recyclables in the secondary market. The municipality can, by undertaking an irreversible investment, adopt a ‡exible program which integrates the existing land…ll strategy with recycling, keeping the option to sw...

Retailers, from fashion stores to grocery stores, have to decide what range of products to offer, i.e., their product assortment. New business trends, such as mass customization and shorter product life cycles, make predicting demand more difficult, which in turn complicates assortment planning. We propose and study a stochastic dynamic programming model for simultaneously making assortment and...

This paper studies controlled systems governed by Ito’s stochastic differential equations in which control variables are allowed to enter both drift and diffusion terms. A new verification theorem is derived within the framework of viscosity solutions without involving any derivatives of the value functions. This theorem is shown to have wider applicability than the restrictive classical verifi...

Storage problems are an important subclass of stochastic control problems. This paper presents a new method, approximate dynamic programming for storage, to solve storage problems with continuous, convex decision sets. Unlike other solution procedures, ADPS allows math programming to be used to make decisions each time period, even in the presence of large state variables. We test ADPS on the d...

We employ a stochastic dynamic programming approach to study decision making by an individual wishing to have an arranged marriage. First, we show that this individual never opts out of a voluntarily agreed uponmarriage. Second, we demonstrate that our marrying individual uses a reservation utility to determine which marriage proposal to accept. Third, we compute the expected length of time dur...

In any supply chain, distribution planning of products is of great importance to managers. With effective and flexible distribution planning, mangers can increase the efficiency of time, place, and delivery utility of whole supply chain. In this paper, inventory routing problem (IRP) is applied to distribution planning of perishable products in a supply chain. The studied supply chain is compos...

G = 60 · f1 + 40 ·min[1, f2 + f3], where fi ∈ [0, 1], i = 1, 2, 3, is the fraction of problem i that you solved correctly. Notice that if you solve correctly both problems 2 and 3, but you do not solve problem 1, your grade will only be G = 40. Thus, try to solve problem 1 first, then choose between problems 2 and 3 (whichever you prefer), and if you still have time, try to do the remaining pro...

Increasing attention has recently been paid to algorithms based on dynamic programming (DP) due to the suitability of DP for learning problems involving control. In stochastic environments where the system being controlled is only incompletely known, however, a unifying theoretical account of these methods has been missing. In this paper we relate DP-based learning algorithms to the powerful te...

The average size of discovered petroleum reserves on the Norwegian continental shelf has declined steadily over the last years. As a consequence, the fields have become economically more marginal, and new and flexible development strategies are required. This paper describes a stochastic dynamic programming model for project evaluation under uncertainty, where emphasis is put on flexibility and...

In this paper, we demonstrate the use of stochastic dynamic programming to solve over-constrained scheduling problems. In particular, we propose a decision method for efficiently calculating, prior to start of execution, the optimal decision for every possible situation encountered in sequential, predictable, overconstrained scheduling domains. We present our resuits using an example problem fr...