Optimal Production Planning Strategy for Deteriorating Items in Terms of Emission Tax, Pollution, and R&D Investment

Lotfi Tadj (), Ajay K. Garg and Abdelouahed Hamdi
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Lotfi Tadj: Fairleigh Dickinson University
Ajay K. Garg: Fairleigh Dickinson University
Abdelouahed Hamdi: Qatar University

A chapter in Emerging Challenges in Business, Optimization, Technology, and Industry, 2018, pp 119-141 from Springer

Abstract: Abstract Firms are faced with the question of what policies to implement to ensure efficient abatement behavior? In this paper, we aim to determine the optimal production rate and the optimal investment rate in pollution abatement technology. The situation is modeled as an optimal control problem with two state variables and two control variables. The optimal trajectories, the optimal control, and the optimal objective function value are obtained explicitly in both cases where the firm adopts either a continuous-review policy or a periodic-review policy. A numerical example is presented.

Keywords: Optimal control; Production planning; Emission tax; Pollution abatement technology (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-58589-5_8

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DOI: 10.1007/978-3-319-58589-5_8

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