Dynamic programming in inventory management: A review

Inventory Management (IM) research has significantly advanced, with increasingly complex and realistic inventory problems being investigated. Dynamic Programming (DP) plays an increasingly vital role to find viable solutions to these problems, particularly in balancing the trade-off between good-quality solutions and computational efficiency. While previous literature reviews have primarily focused on either IM or DP independently, or have studied very specific IM–DP settings, we are the first to provide a comprehensive overview of the interaction between IM and DP. By analyzing 278 relevant articles, we explore how DP methodologies are applied across various inventory problems, identifying key trends, challenges, and research gaps. We introduce a unique typology to classify these articles based on the type and structure of the inventory problem and DP methodology employed. Additionally, our review provides insights into practical applications of DP in IM, and examines the current and potential future integration of sustainability and technology topics in this area.