Agent based modelling and simulation: An examination of customer retention in the UK mobile market

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.Customer retention is an important issue for any business, especially in mature markets such as the UK mobile market where new customers can only be acquired from competitors. Different methods and techniques have been used to investigate customer retention including statistical methods and data mining. However, due to the increasing complexity of the mobile market, the effectiveness of these techniques is questionable. This study proposes Agent-Based Modelling and Simulation (ABMS) as a novel approach to investigate customer retention. ABMS is an emerging means of simulating behaviour and examining behavioural consequences. In outline, agents represent customers and agent relationships represent processes of agent interaction. This study follows the design science paradigm to build and evaluate a generic, reusable, agent-based (CubSim) model to examine the factors affecting customer retention based on data extracted from a UK mobile operator. Based on these data, two data mining models are built to gain a better understanding of the problem domain and to identify the main limitations of data mining. This is followed by two interrelated development cycles: (1) Build the CubSim model, starting with modelling customer interaction with the market, including interaction with the service provider and other competing operators in the market; and (2) Extend the CubSim model by incorporating interaction among customers. The key contribution of this study lies in using ABMS to identify and model the key factors that affect customer retention simultaneously and jointly. In this manner, the CubSim model is better suited to account for the dynamics of customer churn behaviour in the UK mobile market than all other existing models. Another important contribution of this study is that it provides an empirical, actionable insight on customer retention. In particular, and most interestingly, the experimental results show that applying a mixed customer retention strategy targeting both high value customers and customers with a large personal network outperforms the traditional customer retention strategies, which focuses only on the customer‘s value.This work is funded by the Brunel Department of Information Systems and Computing (DISC

Evolution of Supply Chain Collaboration: Implications for the Role of Knowledge

Increasingly, research across many disciplines has recognized the shortcomings of the traditional “integration prescription” for inter-organizational knowledge management. This research conducts several simulation experiments to study the effects of different rates of product change, different demand environments, and different economies of scale on the level of integration between firms at different levels in the supply chain. The underlying paradigm shifts from a static, steady state view to a dynamic, complex adaptive systems and knowledge-based view of supply chain networks. Several research propositions are presented that use the role of knowledge in the supply chain to provide predictive power for how supply chain collaborations or integration should evolve. Suggestions and implications are suggested for managerial and research purposes

Understanding Deregulated Retail Electricity Markets in the Future: A Perspective from Machine Learning and Optimization

On top of Smart Grid technologies and new market mechanism design, the further deregulation of retail electricity market at distribution level will play a important role in promoting energy system transformation in a socioeconomic way. In today’s retail electricity market, customers have very limited ”energy choice,” or freedom to choose different types of energy services. Although the installation of distributed energy resources (DERs) has become prevalent in many regions, most customers and prosumers who have local energy generation and possible surplus can still only choose to trade with utility companies.They either purchase energy from or sell energy surplus back to the utilities directly while suffering from some price gap. The key to providing more energy trading freedom and open innovation in the retail electricity market is to develop new consumer-centric business models and possibly a localized energy trading platform. This dissertation is exactly pursuing these ideas and proposing a holistic localized electricity retail market to push the next-generation retail electricity market infrastructure to be a level playing field, where all customers have an equal opportunity to actively participate directly. This dissertation also studied and discussed opportunities of many emerging technologies, such as reinforcement learning and deep reinforcement learning, for intelligent energy system operation. Some improvement suggestion of the modeling framework and methodology are included as well.Ph.D.College of Engineering & Computer ScienceUniversity of Michigan-Dearbornhttps://deepblue.lib.umich.edu/bitstream/2027.42/145686/1/Tao Chen Final Dissertation.pdfDescription of Tao Chen Final Dissertation.pdf : Dissertatio

Digital twin as risk-free experimentation aid for techno-socio-economic systems

Environmental uncertainties and hyperconnectivity force techno-socio-economic systems to introspect and adapt to succeed and survive. Current practice is chiefly intuition-driven which is inconsistent with the need for precision and rigor. We propose that this can be addressed through the use of digital twins by combining results from Modelling & Simulation, Artificial Intelligence, and Control Theory to create a risk free ‘in silico’ experimentation aid to help: (i) understand why system is the way it is, (ii) be prepared for possible outlier conditions, and (iii) identify plausible solutions for mitigating the outlier conditions in an evidence-backed manner. We use reinforcement learning to systematically explore the digital twin solution space. Our proposal is significant because it advances the effective use of digital twins to new problem domains that have greater impact potential. Our novel approach contributes a meta model for simulatable digital twin of industry scale techno-socio-economic systems, agent-based implementation of the digital twin, and an architecture that serves as a risk-free experimentation aid to support simulation-based evidence-backed decision-making. We also discuss validation of this approach, associated technology infrastructure, and architecture through a representative sample of industry-scale real-world use cases

Incorporating temporal-bounded CBR techniques in real-time agents

Nowadays, MAS paradigm tries to move Computation to a new level of abstraction: Computation as interaction, where large complex systems are seen in terms of the services they offer, and consequently in terms of the entities or agents providing or consuming services. However, MAS technology is found to be lacking in some critical environments as real-time environments. An interaction-based vision of a real-time system involves the purchase of a responsibility by any entity or agent for the accomplishment of a required service under possibly hard or soft temporal conditions. This vision notably increases the complexity of these kinds of systems. The main problem in the architecture development of agents in real-time environments is with the deliberation process where it is difficult to integrate complex bounded deliberative processes for decision-making in a simple and efficient way. According to this, this work presents a temporal-bounded deliberative case-based behaviour as an anytime solution. More specifically, the work proposes a new temporal-bounded CBR algorithm which facilitates deliberative processes for agents in real-time environments, which need both real-time and deliberative capabilities. The paper presents too an application example for the automated management simulation of internal and external mail in a department plant. This example has allowed to evaluate the proposal investigating the performance of the system and the temporal-bounded deliberative case-based behaviour. 2010 Elsevier Ltd. All rights reserved.This work is supported by TIN2006-14630-C03-01 projects of the Spanish government, GVPRE/2008/070 project, FEDER funds and CONSOLIDER-INGENIO 2010 under Grant CSD2007-00022.Navarro Llácer, M.; Heras Barberá, SM.; Julian Inglada, VJ.; Botti Navarro, VJ. (2011). Incorporating temporal-bounded CBR techniques in real-time agents. Expert Systems with Applications. 38(3):2783-2796. https://doi.org/10.1016/j.eswa.2010.08.070S2783279638

KuaiSim: A Comprehensive Simulator for Recommender Systems

Reinforcement Learning (RL)-based recommender systems (RSs) have garnered considerable attention due to their ability to learn optimal recommendation policies and maximize long-term user rewards. However, deploying RL models directly in online environments and generating authentic data through A/B tests can pose challenges and require substantial resources. Simulators offer an alternative approach by providing training and evaluation environments for RS models, reducing reliance on real-world data. Existing simulators have shown promising results but also have limitations such as simplified user feedback, lacking consistency with real-world data, the challenge of simulator evaluation, and difficulties in migration and expansion across RSs. To address these challenges, we propose KuaiSim, a comprehensive user environment that provides user feedback with multi-behavior and cross-session responses. The resulting simulator can support three levels of recommendation problems: the request level list-wise recommendation task, the whole-session level sequential recommendation task, and the cross-session level retention optimization task. For each task, KuaiSim also provides evaluation protocols and baseline recommendation algorithms that further serve as benchmarks for future research. We also restructure existing competitive simulators on the KuaiRand Dataset and compare them against KuaiSim to future assess their performance and behavioral differences. Furthermore, to showcase KuaiSim's flexibility in accommodating different datasets, we demonstrate its versatility and robustness when deploying it on the ML-1m dataset

Portfolio Construction: The Efficient Diversification of Marketing Investments

Efforts in the marketing sciences can be distinguished between the analysis of individual customers and the examination of portfolios of customers, giving scarce theoretical guidance concerning the strategic allocation of promotional investments. Yet, strategic asset allocation is considered in financial economics theory to be the most important set of investment decisions. The problem addressed in this study was the application of strategic asset allocation theory from financial economics to marketing science with the aim of improving the financial results of investment in direct marketing promotions. This research investigated the components of efficient marketing portfolio construction which include multiattribute numerical optimization, stochastic Brownian motion, peer index tracking schemes, and data mining methods to formulate unique investable asset classes. Three outcomes resulted from this study on optimal diversification: (a) reduced saturative promotional activities balancing inefficient advertising cost and enterprise revenue objectives to achieve an investment equilibrium state; (b) the use of utility theory to assist in the lexicographic ordering of goal priorities; and (c) the solution approach to a multiperiod linear goal program with stochastic extensions. A performance test using a large archival set of customer data illustrated the benefits of efficient portfolio construction. The test asset allocation resulted in significantly more reward than that of the benchmark case. The results of this grounded theory study may be of interest to marketing researchers, operations research practitioners, and functional marketing executives. The social change implication is increased efficiency in allocation of large advertising budgets resulting in improved corporate performance