Neuro-dynamic programming for cooperative inventory control

In multi-retailer inventory control the possibility of sharing set up costs motivates communication and coordination among the retailers. We solve the problem of finding suboptimal distributed reordering policies which minimize set up, ordering, storage and shortage costs, incurred by the retailers over a finite horizon. Neuro-dynamic programming (NDP) reduces the computational complexity of the solution algorithm from exponential to polynomial on the number of retailers.