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PRESENTATION ON DYNAMIC
PROGRAMMING

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 SEQUENCE OF PRESENTATION
• Introduction

• Basic Concepts of Dynamic Programming

• Procedure to Solve DPP

• Forward & Backward Computational Procedure

• Applications

• Examples
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 INTRODUCTION

• It is a mathematical technique which deals with

the optimization of multistage decision problems

• The technique was developed by Richard

Bellman & G B Dantzing in 1950

• In Dynamic Programming a standard

mathematical formulation does not exist

• The problem is divided into number of sub

problems and solutions of sub problems are then
combined to get overall solution
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 BASIC CONCEPTS OF DYNAMIC
PROGRAMMING
Stage

A stage signifies a portion of the total

problem for which a decision can be taken

Stage Decision

At each stage there are number of

alternatives and selection of the most suitable and
feasible alternative is called stage decision

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 BASIC CONCEPTS OF DYNAMIC
PROGRAMMING
State

The condition of the decision process at a

stage is called its state

State Variables

The variables which specify the condition of the

decision process at a particular stage are called
state variables
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 BASIC CONCEPTS OF DYNAMIC
PROGRAMMING
Decision Variables

The unknowns in the given problem that

need to be determined are called decision
variables

Return Function

An equation which represents contribution of

each stage is called a return function

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 BASIC CONCEPTS OF DYNAMIC
PROGRAMMING
Recursive Relationship

It represents a mathematical expression

connecting the optimal solution of the earlier
stages and the return function from the current
stage

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 BASIC CONCEPTS OF DYNAMMIC
PROGRAMMING
Principle of Optimality

“An optimal policy (a sequence of decisions)

has the property that whatever the initial state and
decisions are, the remaining decisions must
constitute an optimal policy with regard to the state
resulting from the first decision”

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 PROCEDURE TO SOLVE DYNAMIC
PROGRAMMING PROBLEMS
• Define the problem variables, determine the
objective function & specify the constraints

• Define the stages of the problem, determine the

state variables & decisions required at each stage

• Develop the recursive relationship for the

optimal return function which permits computation
of the optimal policy at any stage

• Make a tabular representation to show the

required values and calculations for each stage
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 FORWARD & BACKWARD
COMPUTATIONAL PROCEDURE
When the Dynamic Programming Problem is
solved using the recursive equation starting from
the first (last) stage to last (first) stage the
computation involved is called forward (backward)
computational procedure

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 APPLICATIONS

• Production

• Allocation of Resources

• Finding Shortest Route

• Inventory Control

• Equipment Replacement Policies

• Selection of an advertising media

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EXAMPLES

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