Optimality inequalities for average cost MDPs and their inventory control applications

We show that the assumptions guaranteeing existence of a solution to the average cost optimality inequalities presented in Schal (1993) for compact action sets can be extended to include the non-compact action set case. Inventory and stochastic cash balance models (with fixed costs) are natural candidates for the application of our results. Extension of the classic models for a general demand distribution are discussed in detail.