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Summary and Concluding Remarks

  • Christoph A. Schneeweiß
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 151)

Abstract

Starting point of our investigations of a linear policy approach to inventory-production models was the linear-quadratic theory presented in Chapter 2. These models are characterized by the linearity of their plant and feedback equations and by the assumption of a quadratic performance criterion. One of the outstanding properties of linear-quadratic models is the small amount of information being required. Due to the validity of the principle of dynamic certainty equivalence total stochastics of the additive inviroment (sequence of demand) can be reduced to conditional mean forecasts without any loss of optimality. This property has been exploited by Holt et. al. in their work on production smoothing and work-force planning.

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Copyright information

© Springer-Verlag Berlin Heidelberg 1977

Authors and Affiliations

  • Christoph A. Schneeweiß
    • 1
  1. 1.Fachbereich Wirtschaftswissenschaften Fachrichtung Operations ResearchFreie Universität BerlinBerlinDeutschland

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