Approximate Solutions of a Dynamic Forecast-Inventory Model
Manufacturing & Service Operations Management · 2006 · Volume 8 · Issue 4
Abstract
In this paper we consider a dynamic forecast-inventory model with forecast updates, based on the martingale model of forecast evolution. Two types of updates are considered, additive and multiplicative. The formulation of the model results in a dynamic program with multidimensional state space. We derive some characteristics of optimal policies and also develop a computational approach to obtain approximate solutions. The approach is based on simulation and function approximation.
Keywords
inventory, demand forecasts, approximate solutions
Enable JavaScript for citation tools and additional paper interactions.