Production control problem of hybrid systems under market circumstances

Under the market circumstances that the demand is uncertain, the production and maintenance control problem of failure prone production system is studied. The demand rate is sometimes larger than the production rate and sometimes smaller than the production rate. The idea of purchasing extra production capacity is introduced to the system. A complex trinal hedging point control policy is presented. By utilizing the simplified method that studies the problem form over the finite horizon to over the infinite horizon, the corresponding hedging points are obtained. Meanwhile, a near-optimal single hedging point control policy is also presented. The numerical results specify the control policies and testify the method.