Application of Stochastic Control Technique in Production and Inventory Model for a Fixed or Constant Demand Rate

This paper deal with the application of stochastic optimal control technique in production and inventory model for a fixed or constant demand rate where the stochastic differential equations are considered as ordinary differential equations driven by white noise justified by the connection of the Ito’s integral and white noise in the case of non-random integrands interpreted as cost functional. Numerical evaluation of such optimal stochastic control theory in production and inventory model of fixed or constant demand rates with its sensitivity effects were illustrated.