DYNAMIC PROGRAMMING

The Basics
Shortest Path Problem
 1st Problem
SHORTEST PATH PROBLEM
Stage 5
 What is the shortest distance from node
10 to itself?
 f5(10) = 0!
Stage 4
 What is the shortest distance from node
8 to node 10?
 f4(8) = 300 + 0 = 300. r4(8) = (8,10).
 What is the shortest distance from node
9 to node 10?
 f4(9) = 350 + 0 = 350. r4(9) = (9,10).
 Stage 3
 What is the shortest distance from node 5 to node
10?
 f3(5) = Min {780+300, 600+350} = 950. r3(5) = (5,9).
 What is the shortest distance from node 6 to node
10?
 f3(6) = Min {240+300, 360+350} = 540. r3(6) = (6,8).
 What is the shortest distance from node 7 to node
10?
 f3(7) = Min {250+300, 600+350} = 550. r3(7) = (7,8).
 Stage 2
 What is the shortest distance from node 2 to node
10?
 f2(2) = 1360. r2(2) = (2,6).
 What is the shortest distance from node 3 to node
10?
 f2(3) = 990. r2(3) = (3,6).
 What is the shortest distance from node 4 to node
10?
 f2(4) = 950. r2(4) = (4,7).
Stage 1
 What is the shortest distance from node
1 to node 10?
 f1(1) = Min {510+1360, 600+990,
1000+950} = 1590.
 r1(1) = (1,3).
Computational Advantage of
DP
 If you were to enumerate all paths, how many are
there?
 18 (How?)
 What is the total computational effort with total
enumeration?
 54 additions and 17 comparisons (How?)
 What is the total computational effort with DP?
 18 additions, 11 comparisons (How?)
 Supposing that the shortest path problem had 11
stages, with 10 states each in stages 2 to 10.
 How do the 2 approaches now compare?
 Characteristics of DP
 Problem can be divided into stages with a
decision required at each stage.
 Each stage has a number of states
associated with it.
 A decision chosen at the current stage
transforms a state in the current stage to
some other state in the next stage.
 Characteristics of DP
 Given the current state in stage t, the optimal
decision in each of the remaining stages does
not depend on previously reached states or
previously chosen decisions.
 PRINCIPLE OF OPTIMALITY
 A recursion relates the cost (reward) in stage t
to the cost (reward) earned from stages t+1 to
T.
ft(i) = Min j{cij + ft+1(j)}
Other DP Problems
 We will now solve each of the remaining
problems
 INVENTORY PLANNING AT XYZ INC. -
Deterministic Case
 INVENTORY PLANNING AT XYZ INC. - Stochastic
Case
 OPTIMAL REPLACEMENT POLICY AT BHARAT
TOOLS – finite time horizon
 OPTIMAL TIMING OF LIQUIDATION OF STOCK