Dynamic tracking in stochastic manufacturing systems

Abstract

This paper deals with the inventory-production control problem where the produced items are assumed to deteriorate with a rate that depends on the demand rate of the production system. The state of this production system is assumed to be described by a continuous-time Markov Process taking values in a finite discrete space. The inventory-production control problem is formulated as a jump linear quadratic control problem. The optimal policy that solves the optimal control problem is obtained in terms of a set of coupled Riccati equations. A numerical example is provided to show the usefulness of the proposed model.