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The sentence in red confused me. I've basic knowledge of control theory so, if you can, please keep it simple.

I understand that with pole-placement regulator (LPR) and linear quadric regulator (LQR) one can use an observer to estimate the system's internal states rather than measuring them directly. One can use Kalman Filter as one of the observers. What kind of observer is used with PID? Does PID need all the states of a system to function?

I'm sorry but it's been some time and even my basic understanding is flawed. Thanks for the help, in advance!

Source: https://www.motioncontroltips.com/what-is-state-space-control/If you design, install, or troubleshoot motion control systems, you’re probably familiar with PID (proportional-integral-derivative) control, which uses feedback to detect errors between the desired position and the actual position and applies corrective commands to compensate for those errors. Although PID control is the most common type of industrial controller, it does have limitations. First, PID control is generally not suitable for systems with multiple inputs and multiple outputs (MIMO), as the transfer functions and differential equations used to represent the system become overly complex when more then one input (or output) is involved. Second, PID control is based on constant parameters, so its effectiveness in controlling non-linear systems is limited.

An alternative control method is state space control. The key difference between PID control (aka “transfer control”) and state space control is that the state space method takes into account the internal state of the system, through what are referred to as “state variables.” These state variables describe the system and its response to any given set of inputs.PID control, on the other hand, relies on an “observer,” which estimates the internal state of the system based on measured inputs and outputs.