A heat exchanger with boiling is considered. The final temperature of steam is controlled with the help of a controller which regulates the flow rate of by-pass water mixing with the outcoming steam. The simplest known mathematical model retaining the nonlinear and distributed parameter nature of the process is adopted. A known method of analysis, namely, Liapunov-Razumikhin theorem, is used to derive results on stability. An interesting feature of the system is that a positive feedback is required for stability. If the control is designed on the basis of minimization of the error in the final temperature alone, then the optimal control, requiring a negative feeedback, leads to sustained oscillations in the intermediate variables, even when the output is steady. The analysis, therefore suggests that meaningful optimization must take into account fluctuations in intermediate variables in addition to the error. A derivative control is shown to improve the transient response.

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