LQR Control of Multiple Product Inventory Systems for Profit and Warehouse Capacity Maximization

This paper describes the management of inventory systems with multiple products. Linear Quadratic Regulator (LQR) strategy is used for optimizing the profit on the sale and managing the warehouse capacity. While the warehouse capacity is always maintained the customer demand for the products, are also satisfied most of the times. The system model of the considered inventory system includes the supply states in it. The control law is designed to keep the warehouse capacity at the desired level and at the same time it takes into account profit maximization from the sale of the products in the inventory. Numerical example of an inventory system with two products is presented to validate the effectiveness of the designed control law.