  Retentive (memory-utilizing) sensing-acting agents may operate under
limitations on the communication between their sensing, memory and acting
components, requiring them to trade off the external cost that they incur with
the capacity of their communication channels. In this paper we formulate this
problem as a sequential rate-distortion problem of minimizing the rate of
information required for the controller's operation under a constraint on its
external cost. We reduce this bounded retentive control problem to the
memoryless one, studied in Part I of this work, by viewing the memory reader as
one more sensor and the memory writer as one more actuator. We further
investigate the structure of the resulting optimal solution and demonstrate its
interesting phenomenology.
