# Newsvendor Model with Deep Reinforcement Learning

arXiv: https://arxiv.org/abs/2112.12544 · HTML: https://mlsanity.com/paper/2112.12544/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 2 of its 8 references that are in the map.
- First posted on arXiv 22 Dec 2021.

## Builds on (most cited first, 2 of 2)

- [Playing Atari with Deep Reinforcement Learning](https://mlsanity.com/paper/1312.5602/) (2013)
- [Addressing Function Approximation Error in Actor-Critic Methods](https://mlsanity.com/paper/1802.09477/) (2018)

## Abstract (arXiv)

I present a deep reinforcement learning (RL) solution to the mathematical problem known as the Newsvendor model, which seeks to optimize profit given a probabilistic demand distribution. To reflect a more realistic and complex situation, the demand distribution can change for different days of the week, thus changing the optimum behavior. I used a Twin-Delayed Deep Deterministic Policy Gradient agent (written as completely original code) with both an actor and critic network to solve this problem. The agent was able to learn optimal behavior consistent with the analytical solution of the problem, and could identify separate probability distributions for different days of the week and behave accordingly.