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Estimation and Optimal Control of an Uncertain Production Process
Author(s) -
Taylor C. Robert,
Chavas JeanPaul
Publication year - 1980
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1239765
Subject(s) - mathematical optimization , certainty , production (economics) , equivalence (formal languages) , dual (grammatical number) , adaptive strategies , computer science , optimal control , adaptive control , monte carlo method , time horizon , control (management) , process (computing) , control theory (sociology) , mathematics , economics , artificial intelligence , statistics , macroeconomics , art , history , geometry , literature , archaeology , discrete mathematics , operating system
Three alternative decision rules for estimation and control of an uncertain production process are examined. One is a certainty equivalence strategy whereby an optimal rate based on current estimates of production parameters is used throughout the planning horizon. A second is updated certainty equivalence, a passively adaptive strategy. Third is an actively adaptive control formulation. Monte‐Carlo simulation results show that the passively adaptive strategy outperforms the others. For the cases simulated, the actively adaptive approximation to the information state for a dual control problem is not good enough to establish superiority of this sophisticated strategy for all problems.