Econometrica: Apr 1966, Volume 34, Issue 2
Decision and Horizon Rules for Stochastic Planning Problems: A Linear Example
Abraham Charnes, Jacques Dreze, Merton MillerAnalytic decision rules and horizon rules are developed for the warehousing problem. A stochastic warehousing problem is defined and solved, first by backwards induction, then by means of a forward working algorithm. The influence of holding costs and discount rates on forecasting horizons is illustrated.
Log In To View Full Content