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In this paper, an optimal gear shifting control strategy based on Dynamic Programming (DP) for a vehicle equipped with a Power-Shift Automated Manual Transmission (PS-AMT) is proposed in order to explore the potential fuel savings. Simulation results on the city part of the New European Drive Cycle (NEDC), called ECE cycle, reveal that the relative fuel economy improvement can be reached up to 15.4% by applying DP shifting strategy compared to the case of applying a prescribed gear shift schedule. A forward facing dynamic power train model and control system are designed and developed for the prototype PS-AMT vehicle in order to validate the system modeling and shifting algorithm implementation. The test results of the prototype vehicle on the roller bench show that 11.2% improvement of fuel economy is achieved. It can be concluded that significant potential fuel savings can be obtained by optimal gear shift control and the proposed design method is consistent.