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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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Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 3
Trading is Not Just for Biz Schools
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Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 4
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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Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 5
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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Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 6
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
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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
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8/17Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 8
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.
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9/17Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 9
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
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10/17Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 10
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
[Desc, Qty, Due Dt, Penalty]
Suppliers
Customers
Manufacturers
Component Market Place
PC Market Place
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Suppliers
Customers
Manufacturers
Component Market Place
PC Market Place
BANK
BidBid
Bid
[RFQ no, price ]
RFQ
[Desc, Qty, Due Dt, Penalty]
RFQ RFQRFQ RFQRFQ RFQ [Desc, Qty, Due Dt] Offer Offer Offer
[RFQ no, Price,Qty,Due dt ]
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Suppliers
Customers
Manufacturers
Component Market Place
PC Market Place
BANK
BidBid
Bid
[RFQ no, price ]
RFQ
[Desc, Qty, Due Dt, Penalty]
RFQ RFQRFQ RFQRFQ RFQ [Desc, Qty, Due Dt] Offer Offer Accepted Offer
[RFQ no, Price,Qty,Due dt ]
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15/17Copyright 2006 N. Sadeh CS-50 Supply Chain Trading Agents Slide 15
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?
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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
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