Real-time Tactical and Strategic Sales Management for Intelligent Agents Guided By Economic Regimes
Many enterprises that participate in dynamic markets need to make product pricing and inventory resource utilization decisions in real-time. We describe a family of statistical models that address these needs by combining characterization of the economic environment with the ability to predict future economic conditions to make tactical (short-term) decisions, such as product pricing, and strategic (long-term) decisions, such as level of finished goods inventories. Our models characterize economic conditions, called economic regimes, in the form of recurrent statistical patterns that have clear qualitative interpretations. We show how these models can be used to predict prices, price trends, and the probability of receiving a customer order at a given price. These “regime” models are developed using statistical analysis of historical data, and are used in real-time to characterize observed market conditions and predict the evolution of market conditions over multiple time scales. We evaluate our models using a testbed derived from the Trading Agent Competition for Supply Chain Management (TAC SCM), a supply chain environment characterized by competitive procurement and sales markets, and dynamic pricing. We show how regime models can be used to inform both short-term pricing decisions and longterm resource allocation decisions. Results show that our method outperforms more traditional shortand long-term predictive modeling approaches.
|Keywords||agent-mediated electronic commerce, dynamic markets, dynamic pricing, economic regimes, enabling technologies, price forecasting, supply-chain, trading agent competition|
|JEL||Information and Product Quality; Standardization and Compatibility (jel L15), Business Administration and Business Economics; Marketing; Accounting (jel M), Management of Technological Innovation and R&D (jel O32)|
|Publisher||Erasmus Research Institute of Management|
|Series||ERIM Report Series Research in Management|
Ketter, W, Collins, J, Gini, M, Gupta, A, & Schrater, P. (2011). Real-time Tactical and Strategic Sales Management for Intelligent Agents Guided By Economic Regimes (No. ERS-2011-012-LIS). ERIM Report Series Research in Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/23339