Notes—Note on “Markovian Decision Models for Reject Allowance Problems”

This note makes two contributions to M. Klein's formulation of the multiperiod reject allowance problem. First, a decomposition algorithm involving both linear and dynamic programming is proposed, and its computational savings over the straight simplex method are demonstrated. Second, in Klein's formulation where termination of production is allowed before reaching the set of terminal states, a lacuna is corrected by means of an enlargement of the state space.