Agent-Based Model:
Consider a competing market situation for three product brands namely P1, P2 and P3. These products are initially manufactured by individual and competing manufactures, M1, M2 and M3 respectively. These products are identical with the same price, so people can buy any one of them they like.
Consider a town with a population of 2000 who are all interested in buying the products. They make the decision on buying which product based on the product adverts and word of mouth. Statistics shows that the advertising effectiveness for each product is as follows - all the manufacturers advertise their products:
Table 3: Advertising effectiveness daily rate
Product Advertising effectiveness (per day) – percent of potential users that become ready to buy
P1 Most likely 0.02
P2 Between 0.01 and 0.03
P3 0.01
Adopters (i.e. users) contact each other on a daily basis, a consumer contact rate is 3 per day. During those contacts the adopters of products may influence potential adopters with probability Adoption Fraction of 0.018, which is the same for all the product brands.
Any product discards in Discard Time between 15 to 20 days and generates the immediate need to buy a replacement of the same brand. However, if any of the product brands do not exist in the market (i.e. retailor stock), the consumers (i.e. potential adopters and/or repeat adopters) wait for that particular brand for a maximum for 3 days. Otherwise, they will buy any brand which is available.
System dynamic model:
Each brand manufacturer has its own supply chain that delivers products to the end consumers. The product with any brand can be purchased by a consumer only from the retailer stock. In this scenario, there is only one agent type for “consumers” with the population of the city. The supply chains for each brand work as follows:
The product is initially manufactured by the producer. The daily production rate may vary and adjusted based on the market demand. Forecasts show that the most probable base rate should be 0.1% above the initial market demand for all brands.
The finished products are delivered to the retailers within 1.5 days. The initial retailer stocks for all brands is 100.
Assignment requirements
You are required to create the simulation model in AnyLogic software using hybrid ABM-SD technique and run the simulation for 1 year. You also need to write a report of between 1500-2500 words with the following structure:
- Introduction - An overview of the problem, aim and objectives, conceptual model and process flow diagram
- Model development - A detailed discussion on how the model was built in Any Logic, the assumptions, the attributes, the input data, market shares (i.e. adopters) and demand measures.
- Simulation results – A discussion of the simulation experiment and the results. Make use of graphs and charts to present and discuss the various results
- Optimization – perform optimization experiments to find the optimal base production rate for each retailor stock to maximize the number of adopters.
- Discussion and conclusions – concluding remarks and highlights from the simulation and optimization experiments.
Sample Solution