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Optimal Strategies of a Production-Inventory Firm with Debt Repayment

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We consider a controlled model of a firm that produces to inventory while simultaneously repaying its debt. Maximization of a terminal functional for this model is considered. The corresponding optimal solutions are analyzed by Pontryagin’s maximum principle. All optimal controls are found depending on the parameters of the original model and the functional weighting coefficient. An appropriate economic interpretation is proposed for the results. Numerical calculations reported in the article establish validity of the theoretical results.

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Authors and Affiliations

  1. Lomonosov Moscow State University, Faculty of Computation Mathematics and Cybernetics, Moscow, Russia

    E. S. Simakov

  2. Texas Women’s University, Department of Mathematics and Computer Science, Denton, TX, USA

    E. V. Grigor’eva

  3. Lomonosov Moscow State University, Faculty of Computation Mathematics and Cybernetics, Moscow, Russia

    E. N. Khailov

Authors
  1. E. S. Simakov
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  2. E. V. Grigor’eva
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  3. E. N. Khailov
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Correspondence to E. S. Simakov.

Additional information

Translated from Problemy Dinamicheskogo Upravleniya, Issue 8, 2017, pp. 169–201.

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Simakov, E.S., Grigor’eva, E.V. & Khailov, E.N. Optimal Strategies of a Production-Inventory Firm with Debt Repayment. Comput Math Model 31, 228–255 (2020). https://doi.org/10.1007/s10598-020-09489-5

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