Elements of dynamic programming: theory and application

2017-07-19Dynamic programming has become a common method in practice in solving optimization problem where decisions are made in stages. It is now widely used in computer science, economics, management, and many other fields. One superiority of dynamic programming is that it enables you to deal with problems with randomness. This thesis starts with basic theory, principle of dynamic programming, to give the detailed approach to solve the multistage decision problems. The deterministic case will be visited first then the stochastic case will be visited. After that, applications are involved in best selling time and inventory control problems. In this two applications, we not only give the DP equations for programming, but also find a general solution under some reasonable assumptions