A Markovian Decision Model for a Joint Replacement and Stocking Problem
- 1 May 1967
- journal article
- Published by Institute for Operations Research and the Management Sciences (INFORMS) in Management Science
- Vol. 13 (9) , 609-617
- https://doi.org/10.1287/mnsc.13.9.609
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.Keywords
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