Sustainable Inventory Management Model for High-Volume Material with Limited Storage Space under Stochastic Demand and Supply

Inventory management and control has become an important management function, which is vital in ensuring the efficiency and profitability of a company’s operations. Hence, several research studies attempted to develop models to be used to minimise the quantities of excess inventory, in order to reduce their associated costs without compromising both operational efficiency and customers’ needs. The Economic Order Quantity (EOQ) model is one of the most used of these models; however, this model has a number of limiting assumptions, which led to the development of a number of extensions for this model to increase its applicability to the modern-day business environment. Therefore, in this research study, a sustainable inventory management model is developed based on the EOQ concept to optimise the ordering and storage of large-volume inventory, which deteriorates over time, with limited storage space, such as steel, under stochastic demand, supply and backorders. Two control systems were developed and tested in this research study in order to select the most robust system: an open-loop system, based on direct control through which five different time series for each stochastic variable were generated, before an attempt to optimise the average profit was conducted; and a closed-loop system, which uses a neural network, depicting the different business and economic conditions associated with the steel manufacturing industry, to generate the optimal control parameters for each week across the entire planning horizon. A sensitivity analysis proved that the closed-loop neural network control system was more accurate in depicting real-life business conditions, and more robust in optimising the inventory management process for a large-volume, deteriorating item. Moreover, due to its advantages over other techniques, a meta-heuristic Particle Swarm Optimisation (PSO) algorithm was used to solve this model. This model is implemented throughout the research in the case of a steel manufacturing factory under different operational and extreme economic scenarios. As a result of the case study, the developed model proved its robustness and accuracy in managing the inventory of such a unique industry

The Creation of Dynamic Visual Objects as a Factor for Optimizing Advertisements in E-Commerce

Introduction: The Covid-19 pandemic has boosted the development of online retail and has created an urgent need to transform digital marketing tools. The purpose of the study is to find ways to optimize advertising in Google and Facebook, which are the superior digital advertising platforms as their top digital advertising platforms in terms of both usage and performance.Methods: An experiment conducted as part of the study showed that the use of the dynamic optimization tool allows you to enrich existing feed data with additional 1st and 3rd party data and automatically compile visuals with additional information obtained from the feed and additional graphical overlays. The proposed method was tested on Facebook and Google with an analysis of click through rate, conversion rate and conversion cost indicators.Findings: The research results showed that the use of the dynamic optimization tool improves the effectiveness of online advertising, all the studied indicators has improved on both platforms. The results obtained complement to the few literature sources devoted to creating enriched feeds on various internet companies, so the work is of significant interest for marketers and business owners who work in the field of e-commerce. Originality: It has been established that in order to increase the conversion rates of ad campaigns and improve the quality of communication with the audience, a deeper study of the behavioral characteristics of visitors of internet resources, as well as high-quality visual content of the ads, are required.

PROMOTION OPTIMIZATION IN COMPETITIVE ENVIRONMENTS BY CONSIDERING THE CANNIBALIZATION EFFECT

This study proposes a new model to optimize sales promotion in competitive markets and examines the impact of competition on sales promotion planning and business performance in retail chains. The model can be used to determine the best promotional discount for different products with a cannibalization effect when competitors are present in the retail market and offer the same products with different discounts. An integer nonlinear programming problem is proposed to model the above issue. To solve the model, it is reformulated as a mixed-integer linear programming problem. Consequently, a MIP solver can be used to solve the model in a reasonable CPU time. Several examples are solved and a sensitivity analysis of the model parameters is performed. The results of our numerical study show interesting findings that considering different competitors is very important in promotion planning and optimization. Failure to take them into account can lead to loss of profits

Forecasting modeling and analytics of economic processes

The book will be useful for economists, finance and valuation professionals, market researchers, public policy analysts, data analysts, teachers or students in graduate-level classes. The book is aimed at students and beginners who are interested in forecasting modeling and analytics of economic processes and want to get an idea of its implementation

A novel multi-level and community-based agent ecosystem to support customers dynamic decision-making in smart grids

Electrical systems have evolved at a fast pace over the past years, particularly in response to the current environmental and climate challenges. Consequently, the European Union and the United Nations have encouraged the development of a more sustainable energy strategy. This strategy triggered a paradigm shift in energy consumption and production, which becoming increasingly distributed, resulted in the development and emergence of smart energy grids. Multi-agent systems are one of the most widely used artificial intelligence concepts in smart grids. Both multi-agent systems and smart grids are distributed, so there is correspondence between the used technology and the network's complex reality. Due to the wide variety of multi-agent systems applied to smart grids, which typically have very specific goals, the ability to model the network as a whole may be compromised, as communication between systems is typically non-existent. This dissertation, therefore, proposes an agent-based ecosystem to model smart grids in which different agent-based systems can coexist. This dissertation aims to conceive, implement, test, and validate a new agent-based ecosystem, entitled A4SG (agent-based ecosystem for smart grids modelling), which combines the concepts of multi-agent systems and agent communities to enable the modelling and representation of smart grids and the entities that compose them. The proposed ecosystem employs an innovative methodology for managing static or dynamic interactions present in smart grids. The creation of a solution that allows the integration of existing systems into an ecosystem, enables the representation of smart grids in a realistic and comprehensive manner. A4SG integrates several functionalities that support the ecosystem's management, also conceived, implemented, tested, and validated in this dissertation. Two mobility functionalities are proposed: one that allows agents to move between physical machines and another that allows "virtual" mobility, where agents move between agent communities to improve the context for the achievement of their objectives. In order to prevent an agent from becoming overloaded, a novel functionality is proposed to enable the creation of agents that function as extensions of the main agent (i.e., branch agents), allowing the distribution of objectives among the various extensions of the main agent. Several case studies, which test the proposed services and functionalities individually and the ecosystem as a whole, were used to test and validate the proposed solution. These case studies were conducted in realistic contexts using data from multiple sources, including energy communities. The results indicate that the used methodologies can increase participation in demand response events, increasing the fitting between consumers and aggregators from 12 % to 69 %, and improve the strategies used in energy transaction markets, allowing an energy community of 50 customers to save 77.0 EUR per week.Os últimos anos têm sido de mudança nos sistemas elétricos, especialmente devido aos atuais desafios ambientais e climáticos. A procura por uma estratégia mais sustentável para o domínio da energia tem sido promovida pela União Europeia e pela Organização das Nações Unidas. A mudança de paradigma no que toca ao consumo e produção de energia, que acontece, cada vez mais, de forma distribuída, tem levado à emergência das redes elétricas inteligentes. Os sistemas multi-agente são um dos conceitos, no domínio da inteligência artificial, mais aplicados em redes inteligentes. Tanto os sistemas multi-agente como as redes inteligentes têm uma natureza distribuída, existindo por isso um alinhamento entre a tecnologia usada e a realidade complexa da rede. Devido a existir uma vasta oferta de sistemas multi-agente aplicados a redes inteligentes, normalmente com objetivos bastante específicos, a capacidade de modelar a rede como um todo pode ficar comprometida, porque a comunicação entre sistemas é, geralmente, inexistente. Por isso, esta dissertação propõe um ecossistema baseado em agentes para modelar as redes inteligentes, onde vários sistemas de agentes coexistem. Esta dissertação pretende conceber, implementar, testar, e validar um novo ecossistema multiagente, intitulado A4SG (agent-based ecosystem for smart grids modelling), que combina os conceitos de sistemas multi-agente e comunidades de agentes, permitindo a modelação e representação de redes inteligentes e das suas entidades. O ecossistema proposto utiliza uma metodologia inovadora para gerir as interações presentes nas redes inteligentes, sejam elas estáticas ou dinâmicas. A criação de um ecossistema que permite a integração de sistemas já existentes, cria a possibilidade de uma representação realista e detalhada das redes de energia. O A4SG integra diversas funcionalidades, também estas concebidas, implementadas, testadas, e validadas nesta dissertação, que suportam a gestão do próprio ecossistema. São propostas duas funcionalidades de mobilidade, uma que permite aos agentes mover-se entre máquinas físicas, e uma que permite uma mobilidade “virtual”, onde os agentes se movem entre comunidades de agentes, de forma a melhorar o contexto para a execução dos seus objetivos. É também proposta uma nova funcionalidade que permite a criação de agentes que funcionam como uma extensão de um agente principal, com o objetivo de evitar a sobrecarga de um agente, permitindo a distribuição de objetivos entre as várias extensões do agente principal. A solução proposta foi testada e validada por vários casos de estudo, que testam os serviços e funcionalidades propostas individualmente, e o ecossistema como um todo. Estes casos de estudo foram executados em contextos realistas, usando dados provenientes de diversas fontes, tais como comunidades de energia. Os resultados demonstram que as metodologias utilizadas podem melhorar a participação em eventos de demand response, subindo a adequação entre consumidores e agregadores de 12 % para 69 %, e melhorar as estratégias utilizadas em mercados de transações de energia, permitindo a uma comunidade de energia com 50 consumidores poupar 77,0 EUR por semana

The rationale, design, implementation and evaluation of business simulation gaming as a tool for management learning

Bibliography: p. 297-302.The concept of Business Simulation Gaming is a relatively new term in the vocabulary of Business educators. This study adopts a Systems Approach to Business Simulation Gaming for the purpose of : (i) creating an overall awareness of the Enlarged Gaming System beyond the mere Implementation phase; and (ii) demonstrating its role as a valuable tool of learning. The four major components of this thesis, namely, the Rationale of Gaming, the Design Process, the Implementation Process and the Evaluation Process, combine to form an integrative whole - the Enlarged Gaming System - in contributing to the stated objectives

Essays on Structural Econometric Modeling and Machine Learning

This dissertation is composed of three independent chapters relating the theory and empirical methodology in economics to machine learning and important topics in information age . The first chapter raises an important problem in structural estimation and provide a solution to it by incorporating a culture in machine learning. The second chapter investigates a problem of statistical discrimination in big data era. The third chapter studies the implication of information uncertainty in the security software market. Structural estimation is a widely used methodology in empirical economics, and a large class of structural econometric models are estimated through the generalized method of moments (GMM). Traditionally, a model to be estimated is chosen by researchers based on their intuition on the model, and the structural estimation itself does not directly test it from the data. In other words, not sufficient amount of attention is paid to devise a principled method to verify such an intuition. In the first chapter, we propose a model selection for GMM by using cross-validation, which is widely used in machine learning and statistics communities. We prove the consistency of the cross-validation. The empirical property of the proposed model selection is compared with existing model selection methods by Monte Carlo simulations of a linear instrumental variable regression and oligopoly pricing model. In addition, we propose the way to apply our method to Mathematical Programming of Equilibrium Constraint (MPEC) approach. Finally, we perform our method to online-retail sales data to compare dynamic model to static model. In the second chapter, we study a fair machine learning algorithm that avoids a statistical discrimination when making a decision. Algorithmic decision making process now affects many aspects of our lives. Standard tools for machine learning, such as classification and regression, are subject to the bias in data, and thus direct application of such off-the-shelf tools could lead to a specific group being statistically discriminated. Removing sensitive variables such as race or gender from data does not solve this problem because a disparate impact can arise when non-sensitive variables and sensitive variables are correlated. This problem arises severely nowadays as bigger data is utilized, it is of particular importance to invent an algorithmic solution. Inspired by the two-stage least squares method that is widely used in the field of economics, we propose a two-stage algorithm that removes bias in the training data. The proposed algorithm is conceptually simple. Unlike most of existing fair algorithms that are designed for classification tasks, the proposed method is able to (i) deal with regression tasks, (ii) combine explanatory variables to remove reverse discrimination, and (iii) deal with numerical sensitive variables. The performance and fairness of the proposed algorithm are evaluated in simulations with synthetic and real-world datasets. The third chapter examines the issue of information uncertainty in the context of information security. Many users lack the ability to correctly estimate the true quality of the security software they purchase, as evidenced by some anecdotes and even some academic research. Yet, most of the analytical research assumes otherwise. Hence, we were motivated to incorporate this “false sense of security” behavior into a game-theoretic model and study the implications on welfare parameters. Our model features two segments of consumers, well-and ill-informed, and the monopolistic software vendor. Well-informed consumers observe the true quality of the security software, while the ill-informed ones overestimate. While the proportion of both segments are known to the software vendor, consumers are uncertain about the segment they belong to. We find that, in fact, the level of the uncertainty is not necessarily harmful to society. Furthermore, there exist some extreme circumstances where society and consumers could be better off if the security software did not exist. Interestingly, we also find that the case where consumers know the information structure and weight their expectation accordingly does not always lead to optimal social welfare. These results contrast with the conventional wisdom and are crucially important in developing appropriate policies in this context

A Double Loop Learning Model For Integrated and Proactive Customer Relationship Management

The rapid development of information technology has changed how firms interact with their customers. On one hand, firms are better capable of collecting customer data, and equip themselves with more powerful analytical tools. On the other hand, customers are becoming more sophisticated in their purchase decision making and other non-purchase interactions, which create higher demand uncertainty for the firm. To survive in this complex and dynamic environment, firms need to manage their customer relationships with an integrated and proactive approach. Recent studies in adaptive learning helped the firm to answer the question of How to learn about customers so they can be proactive in their CRM practice. In this study, we introduce the concept of Double Loop Learning, where we added a strategic learning loop to the adaptive learning loop. With this double loop structure, we also answer the questions of Why to learn and What to learn and Who should be learn simultaneously in an integrated framework. We use a Partially Observable Markov Decision Process (POMDP) approach to 1). Generate optimal marketing contact policy which balances exploration (learning how various modes of marketing contacts affect the transition of customer relationship state) and exploitation (maximizing short-term profit), and 2). Assess the Value of Learning (VOL) at individual customer level to give a feedback to the strategic learning loop where we can answer the questions of Why, What to learn at individual customer level. Theoretically, we introduced the concept of Double Loop Learning to marketing literature which is fundamental in that it achieves both effectiveness and efficiency in the marketing strategy development. Methodologically, we adopted a POMDP approach which enables us to access the value of information for connecting two loops in an integrated framework. In the first essay, we did extensive review on the CRM and Adaptive Learning literature, based on which we developed the conceptual framework for Double Loop Learning model. We also developed an analytical model to demonstrate the relationship between the VOL and Dynamic Customer Value (DCV) of the customers. In the second essay, we apply the proposed framework to an IT B2B firm. We show that the firm can achieve value gains by managing VOL and DCV simultaneously