Short Notes on Dynamic Programming

Dynamic programming is sequential decision making technique. It is a recursive technique we come from final stage to initial stages. A decision taken at one stage influences the decisions in other stages. Dynamic programming technique is useful in a large number of multi period business problems.

Terms in dynamic programming:

• Stage: Period or logical sub problem.
• State variables: Possible initial situations or conditions.
• Decision variables: Alternatives that exist at each stage.
• Decision criteria: Statement concerning objectives of a problem.
• Optimum policy: A set of decision rules developed as a result of decision criterion that gives optimal decision.

Advantages of dynamic programming:

Efficiency: Reduces the time complexity of certain problems from exponential to polynomial. Structured: Provides a clear structure for solving complex problems.

Dynamic programming is widely used in fields such as operations research, computer science and economics for optimization and decision-making problems.