Towards the development of a simulator for investigating the impact of people management practices on retail performance

Models to understand the impact of management practices on retail performance are often simplistic and assume low levels of noise and linearity. Of course, in real life, retail operations are dynamic, nonlinear and complex. To overcome these limitations, we investigate discrete-event and agent-based modelling and simulation approaches. The joint application of both approaches allows us to develop simulation models that are heterogeneous and more life-like, though poses a new research question: When developing such simulation models one still has to abstract from the real world, however, ideally in such a way that the ‘essence’ of the system is still captured. The question is how much detail is needed to capture this essence, as simulation models can be developed at different levels of abstraction. In the literature the appropriate level of abstraction for a particular case study is often more of an art than a science. In this paper, we aim to study this question more systematically by using a retail branch simulation model to investigate which level of model accuracy obtains meaningful results for practitioners. Our results show the effects of adding different levels of detail and we conclude that this type of study is very valuable to gain insight into what is really important in a model.

[1]  Flaminio Squazzoni,et al.  Does Empirical Embeddedness Matter? Methodological Issues on Agent-Based Models for Analytical Social Science , 2005, J. Artif. Soc. Soc. Simul..

[2]  M Cortina-Borja,et al.  Beyond beta: Other continuous families of distributions with bounded support and applications , 2006 .

[3]  Agent-based simulations may help you make better marketing decisions , .

[4]  A. Greasley,et al.  Using DEA and simulation in guiding operating units to improved performance , 2005, J. Oper. Res. Soc..

[5]  Uwe Aickelin,et al.  Modelling and Simulating Retail Management Practices: A First Approach , 2009, Int. J. Simul. Process. Model..

[6]  F. S. Hillier,et al.  Introduction to Operations Research, 10th ed. , 1986 .

[7]  Youjae Yi.  A Critical review of consumer satisfaction , 1989 .

[8]  Toby D. Wall,et al.  The romance of human resource management and business performance, and the case for big science , 2005 .

[9]  Stewart Robinson,et al.  Simulation: The Practice of Model Development and Use , 2004 .

[10]  M. Blakemore,et al.  'One brand, three ways to shop': situational variables and multichannel consumer behaviour , 2002 .

[11]  Jean-Claude Usunier,et al.  Cognitive, demographic, and situational determinants of service customer preference for personnel-in-contact over self-service technology , 2007 .

[12]  E. Ostrom,et al.  Empirically Based, Agent-based models , 2006 .

[13]  V.S. Koritarov.  Real-world market representation with agents , 2004, IEEE Power and Energy Magazine.

[14]  Oded Berman,et al.  A queueing control model for retail services having back room operations and cross-trained workers , 2004, Comput. Oper. Res..

[15]  H. Simon,et al.  The sciences of the artificial (3rd ed.) , 1996 .

[16]  Jonathon Payne,et al.  The Organisation of Productivity: Re-thinking Skills and Work Organisation , 2006 .

[17]  Uwe Aickelin,et al.  The Role of Management Practices in Closing the Productivity Gap , 2008, ArXiv.

[18]  Alan Brown,et al.  Models of Consumer Behaviour , 1973 .

[19]  C. Fornell,et al.  The American Customer Satisfaction Index: Nature, Purpose, and Findings , 1996 .

[20]  Hazhir Rahmandad,et al.  Heterogeneity and Network Structure in the Dynamics of Diffusion: Comparing Agent-Based and Differential Equation Models , 2004, Manag. Sci..

[21]  C. Baydar.  Agent-based modeling and simulation of store performance for personalized pricing , 2003, Proceedings of the 2003 Winter Simulation Conference, 2003..

[22]  Rosanna Garcia.  Uses of Agent-Based Modeling in Innovation/New Product Development Research , 2005 .

[23]  Nicolaas J. Vriend,et al.  Self-organization of markets: An example of a computational approach , 1995 .

[24]  Björn P. Stahmer,et al.  SimMarket: Multiagent-Based Customer Simulation and Decision Support for Category Management , 2003, MATES.

[25]  Balázs Csik.  SIMULATION OF COMPETITIVE MARKET SITUATIONS USING INTELLIGENT AGENTS , 2003 .

[26]  Bridget Rosewell,et al.  Assessing the Productivity of the UK Retail Sector , 2005 .

[27]  G. Löffler,et al.  Agent-based simulation of consumer behavior in grocery shopping on a regional level , 2007 .

[28]  Anand S. Rao,et al.  BDI Agents: From Theory to Practice , 1995, ICMAS.

[29]  Vince Darley,et al.  AN AGENT-BASED MODEL OF A CORRUGATED BOX FACTORY: THE TRADEOFF BETWEEN FINISHED-GOODS- STOCK AND ON-TIME-IN-FULL DELIVERY , 2004 .

[30]  Averill M. Law,et al.  Simulation Modeling and Analysis , 1982 .

[31]  Alexis Drogoul,et al.  Agent-based interaction analysis of consumer behavior , 2002, AAMAS '02.

[32]  Michael Batty,et al.  Pedestrian Behaviour Modelling An application to retail movements using a genetic algorithm , 2004 .

[33]  H. Vos.  Trade and Industry , 1946 .

[34]  H. Van Dyke Parunak,et al.  Agent-Based Modeling vs. Equation-Based Modeling: A Case Study and Users' Guide , 1998, MABS.

[35]  Arndt Schwaiger.  Modellierung und Analyse individuellen Konsumentenverhaltens mit probabilistischen Holonen , 2005 .

[36]  J. D. Johannes,et al.  Systems Simulation: The Art and Science , 1975, IEEE Transactions on Systems, Man, and Cybernetics.

[37]  Uwe Aickelin,et al.  Using intelligent agents to understand management practices and retail productivity , 2007, 2007 Winter Simulation Conference.

[38]  Herbert A. Simon,et al.  The Sciences of the Artificial , 1970 .

[39]  C. Vlek,et al.  Behaviour in commons dilemmas: Homo economicus and Homo psychologicus in an ecological-economic model , 2000 .

[40]  B. Edmonds,et al.  Sociology and Simulation: Statistical and Qualitative Cross‐Validation1 , 2005, American Journal of Sociology.

[41]  R. Faure,et al.  Introduction to operations research , 1968 .

[42]  Eric Bonabeau,et al.  Agent-based modeling: Methods and techniques for simulating human systems , 2002, Proceedings of the National Academy of Sciences of the United States of America.

[43]  Omer Tsimhoni,et al.  Integrating agent based modeling into a discrete event simulation , 2005, Proceedings of the Winter Simulation Conference, 2005..

[44]  W. Jager.  The four P's in social simulation, a perspective on how marketing could benefit from the use of social simulation , 2007 .

[45]  R. Deal.  Simulation Modeling and Analysis (2nd Ed.) , 1994 .

[46]  Gudela Grote,et al.  An international survey of the use and effectiveness of modern manufacturing practices , 2002 .

[47]  Wander Jager,et al.  Stimulating diffusion of green products Co-evolution between firms and consumers , 2002 .

[48]  Wander Jager,et al.  Faculteit Der Economische Wetenschappen En Econometric Serie Research Memoranda Fashions, Habits and Changing Preferences: Simulations of Psychological Factors Affecting Market Dynamics Fashions, Habits and Changing Preferences: Simulation of Psychological Factors Affecting Market Dynamics , 2022 .

[49]  Junwei Cao,et al.  Evaluation of Advertising Effectiveness Using Agent-Based Modeling and Simulation , 1999 .

[50]  Wander Jager,et al.  Stimulating diffusion of green products , 2002 .

[51]  Paul Twomey,et al.  Agent‐based modelling of customer behaviour in the telecoms and media markets , 2002 .

[52]  John Pourdehnad,et al.  System Dynamics and Intelligent Agent-Based Simulation : Where is the Synergy ? , 2022 .

[53]  Chris W. Clegg,et al.  THE IMPACT OF HUMAN RESOURCE AND OPERATIONAL MANAGEMENT PRACTICES ON COMPANY PRODUCTIVITY: A LONGITUDINAL STUDY , 2008 .

[54]  Iqbal Adjali,et al.  Agent-Based Modelling — Intelligent Customer Relationship Management , 2003 .