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Dynamic Programming Model (dynamic + programming_model)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	60%

Selected Abstracts

OUTPUT VERSUS INPUT CONTROLS UNDER UNCERTAINTY: THE CASE OF A FISHERY

NATURAL RESOURCE MODELING, Issue 2 2009
SATOSHI YAMAZAKI
Abstract The paper compares the management outcomes with a total allowable catch (TAC) and a total allowable effort (TAE) in a fishery under uncertainty. Using a dynamic programming model with multiple uncertainties and estimated growth, harvest, and effort functions from one of the world's largest fisheries, the relative economic and biological benefits of a TAC and TAE are compared and contrasted in a stochastic environment. This approach provides a decision and modeling framework to compare instruments and achieve desired management goals. A key finding is that neither instrument is always preferred in a world of uncertainty and that regulator's risk aversion and weighting in terms of expected net profits and biomass, and the trade-offs in terms of expected values and variance determine instrument choice. [source]

A branch and bound algorithm for computing optimal replacement policies in consecutive k -out-of- n -systems

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 3 2002
James Flynn
Abstract This paper presents a branch and bound algorithm for computing optimal replacement policies in a discrete-time, infinite-horizon, dynamic programming model of a binary coherent system with n statistically independent components, and then specializes the algorithm to consecutive k -out-of- n systems. The objective is to minimize the long-run expected average undiscounted cost per period. (Costs arise when the system fails and when failed components are replaced.) An earlier paper established the optimality of following a critical component policy (CCP), i.e., a policy specified by a critical component set and the rule: Replace a component if and only if it is failed and in the critical component set. Computing an optimal CCP is a optimization problem with n binary variables and a nonlinear objective function. Our branch and bound algorithm for solving this problem has memory storage requirement O(n) for consecutive k -out-of- n systems. Extensive computational experiments on such systems involving over 350,000 test problems with n ranging from 10 to 150 find this algorithm to be effective when n , 40 or k is near n. © 2002 Wiley Periodicals, Inc. Naval Research Logistics 49: 288,302, 2002; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/nav.10017 [source]

Means Testing Retirement Benefits: fostering equity or discouraging savings?,

THE ECONOMIC JOURNAL, Issue 528 2008
James Sefton
Means testing plays an important role in the UK state pension system. We use a dynamic programming model to consider the effects of a recent policy reform that reduced the marginal tax rates on private income of means tested retirement benefits from 100% to 40%. Our analysis suggests that the policy reform will encourage the poorest third of all households to both save more and delay retirement, and have the opposite effects on richer households. The policy reform provides a reasonable compromise between the distortions associated with high marginal tax rates and the costs of universal benefits provision. [source]

Urban water management: optimal price and investment policy under climate variability,

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 2 2009
Neal Hughes
Australian urban water utilities face a significant challenge in designing appropriate demand management and supply augmentation policies in the presence of significant water scarcity and climate variability. This article considers the design of optimal demand management and supply augmentation policies for urban water. In particular, scarcity pricing is considered as a potential alternative to the predominant demand management policy of water restrictions. A stochastic dynamic programming model of an urban water market is developed based on data from the ACT region. Given a specification of the demand and supply for urban water state dependent optimal price and investment policies are estimated. The results illustrate how the optimal urban water price varies inversely with the prevailing storage level and how the optimal timing of investment differs significantly between rain dependent and rain independent augmentation options. [source]

Savings and technology choice for risk averse farmers

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2002
Donna Brennan
Farmers in developing countries have limited opportunities for borrowing to even out variability associated with risky farm income, but they can save. A dynamic programming model of savings is presented in the current paper which examines optimal savings strategies for farmers, using a case study of integrated rice,shrimp farms in Vietnam. It is shown that when savings are accounted for, the expected utility ranking of different risky farm choices may not differ that much between farmers with different levels of risk aversion. [source]