Optimal tracker for unreliable manufacturing systems

This paper deals with the inventory-production control problem where the pr oduced items are assumed to deteriorate at a rate that depends on the deman d rate of the production system. The state of this production system is ass umed to be described by a continuous-time Markov process taking values in a finite discrete space. The inventory-production control problem is formula ted as a stochastic optimal control problem. The optimal policy that solves the optimal control problem is obtained in terms of a set of coupled Ricca ti equations. The guaranteed cost problem is also treated. A numerical exam ple is provided to show the usefulness of the proposed model.