The application of the dynamic programming method in investment optimization

Abstract

This paper deals with the problem of investment in Measuring Transformers Factory in Zajecar and the application of the dynamic programming method as one of the methods used in business process optimization. Dynamic programming is a special case of nonlinear programming that is widely applicable to nonlinear systems in economics. Measuring Transformers Factory in Zajecar was founded in 1969. It manufactures electrical equipment, primarily low and medium voltage current measuring transformers, voltage transformers, bushings, etc. The company offers a wide range of products and for this paper's needs the company's management selected three products for each of which optimal investment costing was made. The purpose was to see which product would be the most profitable and thus proceed with the manufacturing and selling of that particular product or products.

Keywords

• dynamic programming
• Bellman's principle of optimality
• investment optimization