Detecting and Forecasting Economic Regimes in Multi-Agent Automated Exchanges

We show how an autonomous agent can use observable market conditions to characterize the microeconomic situation of the market and predict future market trends. The agent can use this information to make both tactical decisions, such as pricing, and strategic decisions, such as product mix and production planning. We develop methods to learn dominant market conditions, such as over-supply or scarcity, from historical data using Gaussian mixture models to construct price density functions. We discuss how this model can be combined with real-time observable information to identify the current dominant market condition and to forecast market changes over a planning horizon. We forecast market changes via both a Markov correction-prediction process and an exponential smoother. Empirical analysis shows that the exponential smoother yields more accurate predictions for the current and the next day (supporting tactical decisions), while the Markov correction-prediction process is better for longer term predictions (supporting strategic decisions). Our approach offers more flexibility than traditional regression based approaches, since it does not assume a fixed functional relationship between dependent and independent variables. We validate our methods by presenting experimental results in a case study, the Trading Agent Competition for Supply Chain Management.dynamic pricing;machine learning;market forecasting;Trading agents

A Comparative Study on Statistical and Machine Learning Forecasting Methods for an FMCG Company

Demand forecasting has been an area of study among scholars and businessmen ever since the start of the industrial revolution and has only gained focus in recent years with the advancements in AI. Accurate forecasts are no longer a luxury, but a necessity to have for effective decisions made in planning production and marketing. Many aspects of the business depend on demand, and this is particularly true for the Fast-Moving Consumer Goods industry where the high volume and demand volatility poses a challenge for planners to generate accurate forecasts as consumer demand complexity rises. Inaccurate demand forecasts lead to multiple issues such as high holding costs on excess inventory, shortages on certain SKUs in the market leading to sales loss and a significant impact on both top line and bottom line for the business. Researchers have attempted to look at the performance of statistical time series models in comparison to machine learning methods to evaluate their robustness, computational time and power. In this paper, a comparative study was conducted using statistical and machine learning techniques to generate an accurate forecast using shipment data of an FMCG company. Naïve method was used as a benchmark to evaluate performance of other forecasting techniques, and was compared to exponential smoothing, ARIMA, KNN, Facebook Prophet and LSTM using past 3 years shipments. Methodology followed was CRISP-DM from data exploration, pre-processing and transformation before applying different forecasting algorithms and evaluation. Moreover, secondary goals behind this paper include understanding associations between SKUs through market basket analysis, and clustering using KNN based on brand, customer, order quantity and value to propose a product segmentation strategy. The results of both clustering and forecasting models are then evaluated to choose the optimal forecasting technique, and a visual representation of the forecast and exploratory analysis conducted is displayed using R

Visual Search at eBay

In this paper, we propose a novel end-to-end approach for scalable visual search infrastructure. We discuss the challenges we faced for a massive volatile inventory like at eBay and present our solution to overcome those. We harness the availability of large image collection of eBay listings and state-of-the-art deep learning techniques to perform visual search at scale. Supervised approach for optimized search limited to top predicted categories and also for compact binary signature are key to scale up without compromising accuracy and precision. Both use a common deep neural network requiring only a single forward inference. The system architecture is presented with in-depth discussions of its basic components and optimizations for a trade-off between search relevance and latency. This solution is currently deployed in a distributed cloud infrastructure and fuels visual search in eBay ShopBot and Close5. We show benchmark on ImageNet dataset on which our approach is faster and more accurate than several unsupervised baselines. We share our learnings with the hope that visual search becomes a first class citizen for all large scale search engines rather than an afterthought.Comment: To appear in 23rd SIGKDD Conference on Knowledge Discovery and Data Mining (KDD), 2017. A demonstration video can be found at https://youtu.be/iYtjs32vh4

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold