Summary: Homework I, Optimal Control of Economic Systems, 2003/2004
Hand out: April 6th
Hand in: April 19th
· It is allowed to discuss the problems with other students.
· Corporation in groups of two people of approximately the same level is allowed.
· Everybody hands in his or her own version.
· It is not allowed to copy from each other.
1. We consider a variation on the oil company problem. As in Example 2.1.3 an oil company is required
to deliver L units of oil. An important difference with Example 2.1.3 now is that the delivery time
is not fixed. Within certain bounds the company may decide when it wants to deliver the oil. Also
the cost criterion is different from that in Example 2.1.3. With
t£ the oil in stock at time t the
production and storage cost up to time over [t¤ t + ¥ t] is approximately equal to:
£ er© 1-t ¥ t