Abstract
We consider a problem of optimal production control of a single reliable machine. Demand is described as a discrete-time stochastic process. The objective is to minimize linear inventory/backlog costs over a finite time horizon. Using the necessary conditions of optimality, which are expressed in terms of co-state dynamics, we develop an optimal control policy. The policy is parameterized and its parameters are calculated from a computational procedure. Numerical examples show the convergence or divergence of the policy when the expected demand is greater or smaller than the production capacity. A non-stationary case is also presented.
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© 2005 Springer
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Khmelnitsky, E., Singer, G. (2005). A Stochastic Optimal Control Policy for A Manufacturing System on A Finite Time Horizon. In: Deissenberg, C., Hartl, R.F. (eds) Optimal Control and Dynamic Games. Advances in Computational Management Science, vol 7. Springer, Boston, MA. https://doi.org/10.1007/0-387-25805-1_16
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DOI: https://doi.org/10.1007/0-387-25805-1_16
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-387-25804-1
Online ISBN: 978-0-387-25805-8
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