supply chain trading agents: competition-based research

8/14/2019 Supply Chain Trading Agents: Competition-Based Research

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Norman M. Sadeh

e-Supply Chain Management Laboratory

ISR- School of Computer Science

Carnegie Mellon University

Supply Chain Trading Agents:Supply Chain Trading Agents:Competition-Based ResearchCompetition-Based Research


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Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 2

Outline

Morning Session (10-11:30am)What is the Supply Chain Trading AgentCompetition (TAC-SCM)? N. Sadeh

Evolution of the Competition, J. Collins

The CS-50 Mini-Tournament, M. BenischAfternoon Session (1:30-3:00pm)

CS-50 Mini-Tournament Results at 2pm

Supply Chain Trading PanelT. Sandholm, J. Collins, M. Fox, M.Benisch and N. Sadeh (moderator)


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Trading is Not Just for Biz Schools


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Automated Trading

On the NYSE, automated tradingaccounts for over 50% of portfoliotrades most weeks

As much as 70% in some weeks

eBay proxy bidding

Ariba spend management solutions

CombineNets combinatorial optimizationsourcing engine

Speed is the key advantage


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So Isnt This a Solved Problem?

If its already taking place, why is it stillchallenging?

Market mechanisms

Multi-attribute negotiation

Competing in concurrent markets

Adapting to opponent strategies

Markets with limited number of players

Delegating decision to softwareprograms is not free of risk


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Supply Chain Management

Planning and coordinating procurement,

production and distribution activitiesFrom raw material suppliers to manufacturers to distribution centers to retailers andconsumers

Includes in-bound, out-bound and reverselogistics

Trillions of dollars annually

Can also be viewed as extending to the servicesector and to digital products

With different characteristics


7/17Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 7

The Need for Agile Supply Chain Solutions

Shorter product life cycles

Increased demand for customization

Global competition

Outsourcing & focus on core competencies

Companies need to rapidly adapt their supplychains as business conditions change

Companies that can quickly evaluate a largernumber of options and can effectivelyinteroperate with others will win



How Do You Evaluate Supply Chain Trading Solutions?

Evaluating techniques against a pre-specifiedset of solutions does not cut itNeed to capture the competitive/strategic nature of supply chain trading

In 2003, our group launched the annualSupply Chain Trading Agent Competition(TAC-SCM)

20 teams from around the world in 2003

Over 30 teams in 2004 and 2005 around 150-200 researchers worldwide

Game has been refined in collaboration with SICSand U. of Minnesota.



Underlying Research Objectives

Explore future possible supply chain

trading scenariosUnderstand tradeoffs associated withdifferent market mechanisms andcontractual relationships

Develop competitive and robust tradingstrategies

Study emerging behavior resulting from

multiple organizations competing inoverlapping customer and suppliermarkets



The Supply Chain Trading Agent Competition

Six PC assembly agents compete in each gameEach has access to the same suppliers and customersEach agent has the same finite capacity

A game lasts 220 days, each dayis simulated in 15 secondsagents bid on customer orders and negotiate suppliesassemble and ship PCsManage finances

Customers

RFQs & orders

Deliveryschedule

Productionschedule

RFQs &orders

Supply ChainManagement

Manufacturers

Suppliers


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BANK

RFQ RFQRFQ RFQRFQBidBid

Bid

[RFQ no, price ]

RFQ

[Desc, Qty, Due Dt, Penalty]

Suppliers

Customers

Manufacturers

Component Market Place

PC Market Place


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BANK

BidBid

Winning Bid

[Bid no, price ]

RFQ


Suppliers

Customers

Manufacturers


PC Market Place


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Suppliers

Customers

Manufacturers


PC Market Place

BANK

BidBid

Bid

[RFQ no, price ]

RFQ


RFQ RFQRFQ RFQRFQ RFQ [Desc, Qty, Due Dt] Offer Offer Offer

[RFQ no, Price,Qty,Due dt ]


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Suppliers

Customers

Manufacturers


PC Market Place

BANK

BidBid

Bid

[RFQ no, price ]

RFQ


RFQ RFQRFQ RFQRFQ RFQ [Desc, Qty, Due Dt] Offer Offer Accepted Offer

[RFQ no, Price,Qty,Due dt ]



TAC-SCM Challenges

Concurrently compete in multiple markets withinterdependencies and uncertaintiesManaging capacity in an environment of constantly changingcomponent supplies and customer demandAdapt to adversary strategies

Suppliers

Customers

PC assembly

What supplies do Ibuy? When?

Who should I sell to?At what price?

How should I bestuse my capacity?

How should I manage myinventory? Too much is costly,too little and I lose customers

I cant afford to belate, or I pay

customer penalties.BANK

Hows my bankbalance?



TAC-SCM Tournament

Qualifying rounds (8-10 days)

Seeding rounds (8-10 days)

Final rounds over 3 days

Hundreds of games pitting manydifferent combinations of agents undermany different market conditions


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CS-50 Mini-Tournament

A selection of 6 agents that reached the

final rounds in 2005GoBlueOval Ford/U. of Michigan (USA)

MinneTAC U. of Minnesota (USA)

PhantAgent U. of Bucharest (Roumania)GeminiJK U. of Gelsenkirchen (Germany)

Mertacor U. of Thessaloniki (Greece)

CMieux Carnegie Mellon U. (USA)Total of 15 games

supply chain trading agents: competition-based research

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