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- Title
A MARKOVIAN DECISION MODEL FOR A JOINT REPLACEMENT AND STOCKING PROBLEM.
- Authors
Derman, C.; Lieberman, G. J.
- Abstract
Two important classes of problems encountered by industry and government are those dealing with replacement policies and ordering policies. These problems are usually treated separately. A particular model which treats the replacement and stocking problems as one is considered in this paper. It is formulated as a denumerable state Markovian decision model. It is shown that the optimal decision policy has a particular structure. In attaining the optimal policy, this structure is exploited so that an optimal policy can be obtained in a finite number of steps.
- Subjects
MARKOV processes; MATHEMATICAL models of decision making; DECISION theory; DECISION making; REPLACEMENT of industrial equipment; INVENTORY control; STOCHASTIC processes; MANAGEMENT science; PROBLEM solving; OPTIMAL designs (Statistics); HOLDING cost; INDUSTRIAL costs
- Publication
Management Science, 1967, Vol 13, Issue 9, p609
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.13.9.609