Optimal Control of a Multi-Item Inventory Model1

The paper provides a new approach to study the problem of optimal control of two-item inventory model with deteriorating items. The to-tal cost includes the sum of the holding costs of inventory, the holding costs of one item due to the presence of other and the production costs. The solution of optimal control problem of two-item model will be car-ried out using Pontrygin principle. The controlled system of non-linear differential equations will be solved numerically. The sensitivity of the system will be analyzed