Chapter 18 Part 2 - Agenda for This Week Wednesday, April...

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Agenda for This Week Wednesday, April 20 Dynamic Programming Case 3 Due Friday, April 22 Dynamic Programming Monday, April 25 AHP Wednesday, April 27 AHP
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Chapter 18 Dynamic Programming – Part 2
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Dynamic Programming Backward Recursion 1. Determine optimal policy for last stage first, labeled as Stage 1 2. Work backward stage by stage to determine optimal policy for each state of every stage i, given optimal policy of each state of stage i-1 3. End at initial stage
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Dynamic Programming Example 2 A firm operates a plantation (4 acres) in South American country that will expropriate the land without compensation at the end of 3 years. In the meantime, the government will buy any number of acres offered at the beginning of any year according to the payment schedule below (remaining land can be farmed):
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Dynamic Programming Example 2 Acres offered Purchase price 1 2 3 4 $40,000 70,000 90,000 100,000 Farming revenue = $10,000/acre/year qi(xi)
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Example 2 Determine optimal sales and production
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Chapter 18 Part 2 - Agenda for This Week Wednesday, April...

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