An approximation to a dynamic inventory model for repairable items

This paper examines a repairable-item inventory problem and introduces an acceleration technique called ‘State Decomposition by Dimension (SDD)’, which speeds up the convergence of the dynamic programming algorithms via reduction in state space. The technique can be useful to approximate the optimal solution to finite-horizon repairable-item inventory problems with a large number of states. Computational results indicate that the SDD technique is very efficient in terms of computation time, with little increase in total cost.