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- W2149968347 abstract "While inventory- and revenue-management problems can be represented as Markov decision process (MDP) models, in some cases the well-known dynamic-programming curse of dimensionality makes it computationally prohibitive to solve them exactly. An alternative solution, called here the control-algorithm approach, is to use a math program (MP) to approximately represent the MDP and use its optimal solution to heuristically instantiate the parameters of the decision rules of a given set of control policies. As new information is observed over time, the control algorithm can incorporate it by re-solving the MP and revising the parameters of the decision rules with the newly obtained solution. The re-solving issue arises when one reflects on the consequences of this revision: Does the performance of the control algorithm really improve by revising its decision-rule instantiation with the solution of the re-solved MP, or should an appropriate modification of the prior solution be used? This paper analyzes the control-algorithm re-solving issue for a class of finite-horizon inventory- and revenue-management problems. It establishes sufficient conditions under which re-solving does not deteriorate the performance of a control algorithm, and it applies these results to control algorithms for network revenue management and multiproduct make-to-order production with lost sales and positive lead time." @default.
- W2149968347 created "2016-06-24" @default.
- W2149968347 creator A5040768089 @default.
- W2149968347 date "2008-07-01" @default.
- W2149968347 modified "2023-10-12" @default.
- W2149968347 title "An Analysis of the Control-Algorithm Re-solving Issue in Inventory and Revenue Management" @default.
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- W2149968347 doi "https://doi.org/10.1287/msom.1070.0184" @default.
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