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For nonlinear interconnected systems against input delay, an observer-based fuzzy adaptive decentralized control strategy is designed. First, different from traditional observers, a novel state observer based on tracking error is proposed to estimate unknown states for the interconnected systems. Secondly, a compensation signal is added to handle the time-varying input delay. Then, the dynamic surface control techniques are utilized in the backstepping approach to overcome the “explosion of complex” problem. Meanwhile, through designed schemes, all variables in the closed-loop systems are promised to be bounded. The errors converge into bounded compact set around the origin. The effectiveness of the designed scheme is validated via a simulation example.