A Price-Directed Approach to Stochastic Inventory/Routing

@article{Adelman2004APA,
  title={A Price-Directed Approach to Stochastic Inventory/Routing},
  author={Daniel Adelman},
  journal={Operations Research},
  year={2004},
  volume={52},
  pages={499-514}
}
We consider a new approach to stochastic inventory/routing that approximates the future costs of current actions using optimal dual prices of a linear program. We obtain two such linear programs by formulating the control problem as a Markov decision process and then replacing the optimal value function with the sum of single-customer inventory value functions. The resulting approximation yields statewise lower bounds on optimal infinite-horizon discounted costs. We present a linear program… CONTINUE READING
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