Article ID: | iaor20042450 |
Country: | Netherlands |
Volume: | 146 |
Issue: | 3 |
Start Page Number: | 553 |
End Page Number: | 579 |
Publication Date: | May 2003 |
Journal: | European Journal of Operational Research |
Authors: | Kiesmller Gudrun P., Scherer Carsten W. |
Keywords: | programming: dynamic |
Inderfurth and Simpson have shown how the optimal decision rules in a stochastic one product recovery system with equal leadtimes can be characterized. Using these results we provide in this paper a method for the exact computation of the parameters which determine the optimal periodic policy. Since exact computation is, especially in case of dynamic demands and returns, quite time consuming, we also provide two different approximations. One is based on an approximation of the value-function in the dynamic programming problem while the other approximation is based on a deterministic model. By means of numerical examples we compare our results and discuss the performance of the approximations.