Neuro-dynamic programming approach to retailer inventory management

Benjamin Van Roy; Dimitri P. Bertsekas; Yuchun Lee; John N. Tsitsiklis

Neuro-dynamic programming approach to retailer inventory management

Benjamin Van Roy, Dimitri P. Bertsekas, Yuchun Lee, John N. Tsitsiklis

Research output: Contribution to journal › Conference article › peer-review

Abstract

We discuss an application of neuro-dynamic programming techniques to the optimization of retailer inventory systems. We describe a specific case study involving a model with thirty-three state variables. The enormity of this state space renders classical algorithms of dynamic programming inapplicable. We compare the performance of solutions generated by neuro-dynamic programming algorithms to that delivered by optimized s-type (`order-up-to') policies. We are able to generate control strategies substantially superior, reducing inventory costs by approximately ten percent.

Original language	English (US)
Pages (from-to)	4052-4057
Number of pages	6
Journal	Proceedings of the IEEE Conference on Decision and Control
Volume	4
State	Published - 1997
Externally published	Yes
Event	Proceedings of the 1997 36th IEEE Conference on Decision and Control. Part 1 (of 5) - San Diego, CA, USA Duration: Dec 10 1997 → Dec 12 1997

ASJC Scopus subject areas

Control and Systems Engineering
Modeling and Simulation
Control and Optimization

Cite this

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title = "Neuro-dynamic programming approach to retailer inventory management",

abstract = "We discuss an application of neuro-dynamic programming techniques to the optimization of retailer inventory systems. We describe a specific case study involving a model with thirty-three state variables. The enormity of this state space renders classical algorithms of dynamic programming inapplicable. We compare the performance of solutions generated by neuro-dynamic programming algorithms to that delivered by optimized s-type (`order-up-to') policies. We are able to generate control strategies substantially superior, reducing inventory costs by approximately ten percent.",

author = "{Van Roy}, Benjamin and Bertsekas, {Dimitri P.} and Yuchun Lee and Tsitsiklis, {John N.}",

year = "1997",

language = "English (US)",

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journal = "Proceedings of the IEEE Conference on Decision and Control",

issn = "0191-2216",

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note = "Proceedings of the 1997 36th IEEE Conference on Decision and Control. Part 1 (of 5) ; Conference date: 10-12-1997 Through 12-12-1997",

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AU - Van Roy, Benjamin

AU - Bertsekas, Dimitri P.

AU - Lee, Yuchun

AU - Tsitsiklis, John N.

PY - 1997

Y1 - 1997

N2 - We discuss an application of neuro-dynamic programming techniques to the optimization of retailer inventory systems. We describe a specific case study involving a model with thirty-three state variables. The enormity of this state space renders classical algorithms of dynamic programming inapplicable. We compare the performance of solutions generated by neuro-dynamic programming algorithms to that delivered by optimized s-type (`order-up-to') policies. We are able to generate control strategies substantially superior, reducing inventory costs by approximately ten percent.

AB - We discuss an application of neuro-dynamic programming techniques to the optimization of retailer inventory systems. We describe a specific case study involving a model with thirty-three state variables. The enormity of this state space renders classical algorithms of dynamic programming inapplicable. We compare the performance of solutions generated by neuro-dynamic programming algorithms to that delivered by optimized s-type (`order-up-to') policies. We are able to generate control strategies substantially superior, reducing inventory costs by approximately ten percent.

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M3 - Conference article

SN - 0191-2216

VL - 4

SP - 4052

EP - 4057

JO - Proceedings of the IEEE Conference on Decision and Control

JF - Proceedings of the IEEE Conference on Decision and Control

T2 - Proceedings of the 1997 36th IEEE Conference on Decision and Control. Part 1 (of 5)

Y2 - 10 December 1997 through 12 December 1997

ER -

Neuro-dynamic programming approach to retailer inventory management

Abstract

ASJC Scopus subject areas

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