This is a project to develop a production function which captures how technological improvements impact the work force. The impact of lead times and lags is a key innovation. Then using optimal control, the optimal mix and expansion/contraction of these elements is determined in an uncertain environment. In a longer term scenario, a model is developed to determine optimal sizing and capacity of new production capacity. The completion of this project should give new insights into the strategic planning process, and help to lead the way to improved corporate and governmental planning.