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Exact Solution for the Production Planning Problem with Several Regimes Switching over an Infinite Horizon Time
Version 1
: Received: 13 September 2023 / Approved: 14 September 2023 / Online: 14 September 2023 (11:50:42 CEST)
A peer-reviewed article of this Preprint also exists.
Covei, D.-P. Exact Solution for the Production Planning Problem with Several Regimes Switching over an Infinite Horizon Time. Mathematics 2023, 11, 4307. Covei, D.-P. Exact Solution for the Production Planning Problem with Several Regimes Switching over an Infinite Horizon Time. Mathematics 2023, 11, 4307.
Abstract
We consider a stochastic production planning problem with regime switching. There are k≥1 regimes corresponding to different economic cycles. The problem is to minimize the production costs and analyze the problem by the value function approach. Our main contribution is to show that the optimal production is characterized by an exact solution of an elliptic system of partial differential equations. A verification result is given for the determined solution.
Keywords
production planning; regime switching; PDE system
Subject
Computer Science and Mathematics, Computational Mathematics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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