Optimal control analysis for service, inventory and preservation technology investment. Issue 2 (3rd April 2019)

• Record Type: Journal Article
• Authors: Shah, Nita H.; Chaudhari, Urmila; Jani, Mrudul Y.
• Is Part Of: International journal of systems science. Volume 6:Issue 2(2019)
• Page Start: 130
• Page End: 142
• Publication Date: 2019-04-03
• Subjects: Inventory control -- dynamic service level -- Pontryagin's maximum principle -- constant deterioration -- preservation technology investment; Operations research -- Periodicals; Logistics -- Periodicals; System analysis -- Periodicals; 003
• DOI: 10.1080/23302674.2018.1447167
• Languages: English
• ISSNs: 2330-2674

Abstract

ABSTRACT: In this paper we analyse an inventory system for dynamic price, service investment when stocks deteriorate at a constant rate. Deterioration is reduced by investing in preservation. The objective is to maximise the total profit of dynamical optimisation problem. The optimal solution is worked out using Pontryagin's maximum principle. Numerical example is used to establish the theoretical derivations. It is established that decision-maker should have efficient service level and preservation facilities. Sensitivity analysis is done to construe decision-making insights.