Towards the Development of a Simulator for Investigating the Impact of People Management Practices on Retail Performance

TL;DR

This paper discusses developing a retail branch simulation model to determine the appropriate level of abstraction needed for meaningful insights into management practices' impact on retail performance.

Contribution

It introduces a simulation framework for retail management, focusing on the level of abstraction necessary for practical and accurate modeling.

Findings

Simulation models can effectively capture complex retail dynamics.

The appropriate level of abstraction varies depending on the analysis goal.

Discrete event and agent-based models are suitable for non-linear, dynamic retail systems.

Abstract

Often models for understanding the impact of management practices on retail performance are developed under the assumption of stability, equilibrium and linearity, whereas retail operations are considered in reality to be dynamic, non-linear and complex. Alternatively, discrete event and agent-based modelling are approaches that allow the development of simulation models of heterogeneous non-equilibrium systems for testing out different scenarios. When developing simulation models one has to abstract and simplify from the real world, which means that one has to try and capture the 'essence' of the system required for developing a representation of the mechanisms that drive the progression in the real system. Simulation models can be developed at different levels of abstraction. To know the appropriate level of abstraction for a specific application is often more of an art than a science. We have developed a retail branch simulation model to investigate which level of model accuracy is required for such a model to obtain meaningful results for practitioners.