Optimal Strategies of a Production-Inventory Firm with Debt Repayment

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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Correspondence to E. S. Simakov.

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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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