A Multi-Agent Simulation of Retail Management Practices

We apply Agent-Based Modeling and Simulation (ABMS) to investigate a set of problems in a retail context. Specifically, we are working to understand the relationship between human resource management practices and retail productivity. Despite the fact we are working within a relatively novel and complex domain, it is clear that intelligent agents do offer potential for developing organizational capabilities in the future. Our multi-disciplinary research team has worked with a UK department store to collect data and capture perceptions about operations from actors within departments. Based on this case study work, we have built a simulator that we present in this paper. We then use the simulator to gather empirical evidence regarding two specific management practices: empowerment and employee development.

Multi-Agent Simulation and Management Practices

Intelligent agents offer a new and exciting way of understanding the world of work. Agent-Based Simulation (ABS), one way of using intelligent agents, carries great potential for progressing our understanding of management practices and how they link to retail performance. We have developed simulation models based on research by a multi-disciplinary team of economists, work psychologists and computer scientists. We will discuss our experiences of implementing these concepts working with a well-known retail department store. There is no doubt that management practices are linked to the performance of an organisation (Reynolds et al., 2005; Wall & Wood, 2005). Best practices have been developed, but when it comes down to the actual application of these guidelines considerable ambiguity remains regarding their effectiveness within particular contexts (Siebers et al., forthcoming a). Most Operational Research (OR) methods can only be used as analysis tools once management practices have been implemented. Often they are not very useful for giving answers to speculative ‘what-if’ questions, particularly when one is interested in the development of the system over time rather than just the state of the system at a certain point in time. Simulation can be used to analyse the operation of dynamic and stochastic systems. ABS is particularly useful when complex interactions between system entities exist, such as autonomous decision making or negotiation. In an ABS model the researcher explicitly describes the decision process of simulated actors at the micro level. Structures emerge at the macro level as a result of the actions of the agents and their interactions with other agents and the environment. We will show how ABS experiments can deal with testing and optimising management practices such as training, empowerment or teamwork. Hence, questions such as “will staff setting their own break times improve performance?” can be investigated.

Agent based simulation as a novel decision support tool for retail managers

Intelligent agents offer a new and exciting way of understanding the world of work. We apply agent-based simulation to investigate a set of problems in a retail context. Specifically, we are working to understand the relationship between human resource management practices and retail productivity. Our multi-disciplinary research team draws upon expertise from work psychologists and computer scientists. Our research so far has led us to conduct case study work with a top ten UK retailer. Based on our case study experience and data we are developing a simulator that can be used to investigate the impact of management practices (e.g. training, empowerment, teamwork) on customer satisfaction and retail productivity.

Modelling and simulating retail management practices: a first approach

Multi-agent systems offer a new and exciting way of understanding the world of work. We apply agent-based modeling and simulation to investigate a set of problems in a retail context. Specifically, we are working to understand the relationship between people management practices on the shop-floor and retail performance. Despite the fact we are working within a relatively novel and complex domain, it is clear that using an agent-based approach offers great potential for improving organizational capabilities in the future. Our multi-disciplinary research team has worked closely with one of the UK’s top ten retailers to collect data and build an understanding of shop-floor operations and the key actors in a department (customers, staff, and managers). Based on this case study we have built and tested our first version of a retail branch agent-based simulation model where we have focused on how we can simulate the effects of people management practices on customer satisfaction and sales. In our experiments we have looked at employee development and cashier empowerment as two examples of shop floor management practices. In this paper we describe the underlying conceptual ideas and the features of our simulation model. We present a selection of experiments we have conducted in order to validate our simulation model and to show its potential for answering “what-if” questions in a retail context. We also introduce a novel performance measure which we have created to quantify customers’ satisfaction with service, based on their individual shopping experiences.

Simulating customer experience and word-of-mouth in retail: a case study

Agents offer a new and exciting way of understanding the world of work. In this paper we describe the development of agent-based simulation models, designed to help to understand the relationship between people management practices and retail performance. We report on the current development of our simulation models which includes new features concerning the evolution of customers over time. To test the features we have conducted a series of experiments dealing with customer pool sizes, standard and noise reduction modes, and the spread of customers’ word of mouth. To validate and evaluate our model, we introduce new performance measure specific to retail operations. We show that by varying different parameters in our model we can simulate a range of customer experiences leading to significant differences in performance measures. Ultimately, we are interested in better understanding the impact of changes in staff behavior due to changes in store management practices. Our multi-disciplinary research team draws upon expertise from work psychologists and computer scientists. Despite the fact we are working within a relatively novel and complex domain, it is clear that intelligent agents offer potential for fostering sustainable organizational capabilities in the future.

Feasibility study to inform the design of a UK multi-centre randomised controlled trial of prophylactic antibiotics for the prevention of recurrent cellulitis of the leg

Background: This paper describes the results of a feasibility study for a randomised controlled trial (RCT). Methods: Twenty-nine members of the UK Dermatology Clinical Trials Network (UK DCTN) expressed an interest in recruiting for this study. Of these, 17 obtained full ethics and Research & Development (R&D) approval, and 15 successfully recruited patients into the study. A total of 70 participants with a diagnosis of cellulitis of the leg were enrolled over a 5-month period. These participants were largely recruited from medical admissions wards, although some were identified from dermatology, orthopaedic, geriatric and general surgery wards. Data were collected on patient demographics, clinical features and willingness to take part in a future RCT. Results: Despite being a relatively common condition, cellulitis patients were difficult to locate through our network of UK DCTN clinicians. This was largely because patients were rarely seen by dermatologists, and admissions were not co-ordinated centrally. In addition, the impact of the proposed exclusion criteria was high; only 26 (37%) of those enrolled in the study fulfilled all of the inclusion criteria for the subsequent RCT, and were willing to be randomised to treatment. Of the 70 participants identified during the study as having cellulitis of the leg (as confirmed by a dermatologist), only 59 (84%) had all 3 of the defining features of: i) erythema, ii) oedema, and iii) warmth with acute pain/tenderness upon examination. Twenty-two (32%) patients experienced a previous episode of cellulitis within the last 3 years. The median time to recurrence (estimated as the time since the most recent previous attack) was 205 days (95% CI 102 to 308). Service users were generally supportive of the trial, although several expressed concerns about taking antibiotics for lengthy periods, and felt that multiple morbidity/old age would limit entry into a 3-year study. Conclusion: This pilot study has been crucial in highlighting some key issues for the conduct of a future RCT. As a result of these findings, changes have been made to i) the planned recruitment strategy, ii) the proposed inclusion criteria and ii) the definition of cellulitis for use in the future trial.

'Bayesian Optimisation for Nurse Scheduling'

A Bayesian optimisation algorithm for a nurse scheduling problem is presented, which involves choosing a suitable scheduling rule from a set for each nurse's assignment. When a human scheduler works, he normally builds a schedule systematically following a set of rules. After much practice, the scheduler gradually masters the knowledge of which solution parts go well with others. He can identify good parts and is aware of the solution quality even if the scheduling process is not yet completed, thus having the ability to finish a schedule by using flexible, rather than fixed, rules. In this paper, we design a more human-like scheduling algorithm, by using a Bayesian optimisation algorithm to implement explicit learning from past solutions. A nurse scheduling problem from a UK hospital is used for testing. Unlike our previous work that used Genetic Algorithms to implement implicit learning [1], the learning in the proposed algorithm is explicit, i.e. we identify and mix building blocks directly. The Bayesian optimisation algorithm is applied to implement such explicit learning by building a Bayesian network of the joint distribution of solutions. The conditional probability of each variable in the network is computed according to an initial set of promising solutions. Subsequently, each new instance for each variable is generated by using the corresponding conditional probabilities, until all variables have been generated, i.e. in our case, new rule strings have been obtained. Sets of rule strings are generated in this way, some of which will replace previous strings based on fitness. If stopping conditions are not met, the conditional probabilities for all nodes in the Bayesian network are updated again using the current set of promising rule strings. For clarity, consider the following toy example of scheduling five nurses with two rules (1: random allocation, 2: allocate nurse to low-cost shifts). In the beginning of the search, the probabilities of choosing rule 1 or 2 for each nurse is equal, i.e. 50%. After a few iterations, due to the selection pressure and reinforcement learning, we experience two solution pathways: Because pure low-cost or random allocation produces low quality solutions, either rule 1 is used for the first 2-3 nurses and rule 2 on remainder or vice versa. In essence, Bayesian network learns 'use rule 2 after 2-3x using rule 1' or vice versa. It should be noted that for our and most other scheduling problems, the structure of the network model is known and all variables are fully observed. In this case, the goal of learning is to find the rule values that maximize the likelihood of the training data. Thus, learning can amount to 'counting' in the case of multinomial distributions. For our problem, we use our rules: Random, Cheapest Cost, Best Cover and Balance of Cost and Cover. In more detail, the steps of our Bayesian optimisation algorithm for nurse scheduling are: 1. Set t = 0, and generate an initial population P(0) at random; 2. Use roulette-wheel selection to choose a set of promising rule strings S(t) from P(t); 3. Compute conditional probabilities of each node according to this set of promising solutions; 4. Assign each nurse using roulette-wheel selection based on the rules' conditional probabilities. A set of new rule strings O(t) will be generated in this way; 5. Create a new population P(t+1) by replacing some rule strings from P(t) with O(t), and set t = t+1; 6. If the termination conditions are not met (we use 2000 generations), go to step 2. Computational results from 52 real data instances demonstrate the success of this approach. They also suggest that the learning mechanism in the proposed approach might be suitable for other scheduling problems. Another direction for further research is to see if there is a good constructing sequence for individual data instances, given a fixed nurse scheduling order. If so, the good patterns could be recognized and then extracted as new domain knowledge. Thus, by using this extracted knowledge, we can assign specific rules to the corresponding nurses beforehand, and only schedule the remaining nurses with all available rules, making it possible to reduce the solution space. Acknowledgements The work was funded by the UK Government's major funding agency, Engineering and Physical Sciences Research Council (EPSRC), under grand GR/R92899/01. References [1] Aickelin U, "An Indirect Genetic Algorithm for Set Covering Problems", Journal of the Operational Research Society, 53(10): 1118-1126,

'Bayesian Optimisation for Nurse Scheduling'

A Bayesian optimisation algorithm for a nurse scheduling problem is presented, which involves choosing a suitable scheduling rule from a set for each nurse's assignment. When a human scheduler works, he normally builds a schedule systematically following a set of rules. After much practice, the scheduler gradually masters the knowledge of which solution parts go well with others. He can identify good parts and is aware of the solution quality even if the scheduling process is not yet completed, thus having the ability to finish a schedule by using flexible, rather than fixed, rules. In this paper, we design a more human-like scheduling algorithm, by using a Bayesian optimisation algorithm to implement explicit learning from past solutions. A nurse scheduling problem from a UK hospital is used for testing. Unlike our previous work that used Genetic Algorithms to implement implicit learning [1], the learning in the proposed algorithm is explicit, i.e. we identify and mix building blocks directly. The Bayesian optimisation algorithm is applied to implement such explicit learning by building a Bayesian network of the joint distribution of solutions. The conditional probability of each variable in the network is computed according to an initial set of promising solutions. Subsequently, each new instance for each variable is generated by using the corresponding conditional probabilities, until all variables have been generated, i.e. in our case, new rule strings have been obtained. Sets of rule strings are generated in this way, some of which will replace previous strings based on fitness. If stopping conditions are not met, the conditional probabilities for all nodes in the Bayesian network are updated again using the current set of promising rule strings. For clarity, consider the following toy example of scheduling five nurses with two rules (1: random allocation, 2: allocate nurse to low-cost shifts). In the beginning of the search, the probabilities of choosing rule 1 or 2 for each nurse is equal, i.e. 50%. After a few iterations, due to the selection pressure and reinforcement learning, we experience two solution pathways: Because pure low-cost or random allocation produces low quality solutions, either rule 1 is used for the first 2-3 nurses and rule 2 on remainder or vice versa. In essence, Bayesian network learns 'use rule 2 after 2-3x using rule 1' or vice versa. It should be noted that for our and most other scheduling problems, the structure of the network model is known and all variables are fully observed. In this case, the goal of learning is to find the rule values that maximize the likelihood of the training data. Thus, learning can amount to 'counting' in the case of multinomial distributions. For our problem, we use our rules: Random, Cheapest Cost, Best Cover and Balance of Cost and Cover. In more detail, the steps of our Bayesian optimisation algorithm for nurse scheduling are: 1. Set t = 0, and generate an initial population P(0) at random; 2. Use roulette-wheel selection to choose a set of promising rule strings S(t) from P(t); 3. Compute conditional probabilities of each node according to this set of promising solutions; 4. Assign each nurse using roulette-wheel selection based on the rules' conditional probabilities. A set of new rule strings O(t) will be generated in this way; 5. Create a new population P(t+1) by replacing some rule strings from P(t) with O(t), and set t = t+1; 6. If the termination conditions are not met (we use 2000 generations), go to step 2. Computational results from 52 real data instances demonstrate the success of this approach. They also suggest that the learning mechanism in the proposed approach might be suitable for other scheduling problems. Another direction for further research is to see if there is a good constructing sequence for individual data instances, given a fixed nurse scheduling order. If so, the good patterns could be recognized and then extracted as new domain knowledge. Thus, by using this extracted knowledge, we can assign specific rules to the corresponding nurses beforehand, and only schedule the remaining nurses with all available rules, making it possible to reduce the solution space. Acknowledgements The work was funded by the UK Government's major funding agency, Engineering and Physical Sciences Research Council (EPSRC), under grand GR/R92899/01. References [1] Aickelin U, "An Indirect Genetic Algorithm for Set Covering Problems", Journal of the Operational Research Society, 53(10): 1118-1126,

Introduction to Multi-Agent Simulation

When designing systems that are complex, dynamic and stochastic in nature, simulation is generally recognised as one of the best design support technologies, and a valuable aid in the strategic and tactical decision making process. A simulation model consists of a set of rules that define how a system changes over time, given its current state. Unlike analytical models, a simulation model is not solved but is run and the changes of system states can be observed at any point in time. This provides an insight into system dynamics rather than just predicting the output of a system based on specific inputs. Simulation is not a decision making tool but a decision support tool, allowing better informed decisions to be made. Due to the complexity of the real world, a simulation model can only be an approximation of the target system. The essence of the art of simulation modelling is abstraction and simplification. Only those characteristics that are important for the study and analysis of the target system should be included in the simulation model. The purpose of simulation is either to better understand the operation of a target system, or to make predictions about a target system’s performance. It can be viewed as an artificial white-room which allows one to gain insight but also to test new theories and practices without disrupting the daily routine of the focal organisation. What you can expect to gain from a simulation study is very well summarised by FIRMA (2000). His idea is that if the theory that has been framed about the target system holds, and if this theory has been adequately translated into a computer model this would allow you to answer some of the following questions: · Which kind of behaviour can be expected under arbitrarily given parameter combinations and initial conditions? · Which kind of behaviour will a given target system display in the future? · Which state will the target system reach in the future? The required accuracy of the simulation model very much depends on the type of question one is trying to answer. In order to be able to respond to the first question the simulation model needs to be an explanatory model. This requires less data accuracy. In comparison, the simulation model required to answer the latter two questions has to be predictive in nature and therefore needs highly accurate input data to achieve credible outputs. These predictions involve showing trends, rather than giving precise and absolute predictions of the target system performance. The numerical results of a simulation experiment on their own are most often not very useful and need to be rigorously analysed with statistical methods. These results then need to be considered in the context of the real system and interpreted in a qualitative way to make meaningful recommendations or compile best practice guidelines. One needs a good working knowledge about the behaviour of the real system to be able to fully exploit the understanding gained from simulation experiments. The goal of this chapter is to brace the newcomer to the topic of what we think is a valuable asset to the toolset of analysts and decision makers. We will give you a summary of information we have gathered from the literature and of the experiences that we have made first hand during the last five years, whilst obtaining a better understanding of this exciting technology. We hope that this will help you to avoid some pitfalls that we have unwittingly encountered. Section 2 is an introduction to the different types of simulation used in Operational Research and Management Science with a clear focus on agent-based simulation. In Section 3 we outline the theoretical background of multi-agent systems and their elements to prepare you for Section 4 where we discuss how to develop a multi-agent simulation model. Section 5 outlines a simple example of a multi-agent system. Section 6 provides a collection of resources for further studies and finally in Section 7 we will conclude the chapter with a short summary.

Optimisation of a crossdocking distribution centre simulation model

This paper reports on continuing research into the modelling of an order picking process within a Crossdocking distribution centre using Simulation Optimisation. The aim of this project is to optimise a discrete event simulation model and to understand factors that affect finding its optimal performance. Our initial investigation revealed that the precision of the selected simulation output performance measure and the number of replications required for the evaluation of the optimisation objective function through simulation influences the ability of the optimisation technique. We experimented with Common Random Numbers, in order to improve the precision of our simulation output performance measure, and intended to use the number of replications utilised for this purpose as the initial number of replications for the optimisation of our Crossdocking distribution centre simulation model. Our results demonstrate that we can improve the precision of our selected simulation output performance measure value using Common Random Numbers at various levels of replications. Furthermore, after optimising our Crossdocking distribution centre simulation model, we are able to achieve optimal performance using fewer simulations runs for the simulation model which uses Common Random Numbers as compared to the simulation model which does not use Common Random Numbers.