Learning Objective of the Article:
- Define and explain the term “dynamic programming”.
- In which situation it is used to optimize the the use of resources.
Definition and Explanation of Dynamic Programming:
Dynamic programming is an extension of the basic linear programming technique and involves breaking the problem into a set of smaller problems and then reassembling the results of the analysis. It is best suited for the solution of problems requiring interrelated decisions, i.e., decisions that must be made in sequence and that influence future decisions in the sequence.
The procedure involves partial optimization of a portion of the sequence and then connection of the optimized portion to the next in line until the entire sequence is optimized. Thus, the final result is the sum of the result of the immediate decision plus the optimal result from all future decisions.
Dynamic programming is simple in concept but difficult to apply because of the lack of a clear-cut problem formulation and solution method. Each problem requires unique formulation and solution decisions.
You may also be interested in other articles from “linear programming technique” chapter
- Linear Programming-Maximization of Contribution Margin-Graphical Method
- Linear Programming-Maximization of Contribution Margin-Simplex Method
- Linear Programming-Minimization of Cost-Graphical Method
- Linear Programming-Minimization of Cost-Simplex Method
- Shadow Prices
- Dynamic Programming
- Linear Programming Techniques-General Observations
- Linear Programming Questions and Answers
- Linear Programming Problems, Graphical and Simplex Method
Other Related Accounting Articles: