The present invention is a method and apparatus for dynamic optimization of a dynamic physical system having a device under control and a controller along with a modeling system having an estimator and a constrained nonlinear program. The time varying trajectories of the dynamic physical system are parameterized and run through the modeling system in order to produce a set of optimal time varying setpoint trajectories to be used in the dynamic physical system. The optimal time varying setpoint trajectories optimize the physical system to produce the desired end result (or product) of the dynamic physical system.