The Role of E-Retailers in Modern Manufacturing: Insights from Agent-Based Simulations

Abstract This study investigates the impact of e-retailers on manufacturers' production and sales dynamics through agent-based modeling and simulation. While traditional retailers have long dominated the retail sector, Industry 4.0 technologies and e-commerce platforms have introduced new dynamics. By comparing manufacturers connected to e-retailers with those linked to traditional retailers, this study highlights the effects on inventory and customer satisfaction in response to changing market conditions and evolving customer preferences, incorporating satisficing behavior. The experiments were conducted under various conditions and random parameter distributions. Manufacturers connected to e-retailers can access more information; however, our model indicates that the accuracy of their sales forecasting methods is crucial. The highest growth was observed in high-quality manufacturers using superior prediction methods and connected to e-retailers, especially when supply exceeded demand. The system became unpredictable when supply and demand were nearly equal. The findings emphasize the importance of e-retailers in reducing unsatisfied customers and inventory levels, alongside the critical role of accurate prediction methods. The model demonstrates the significance of using agent-based models in modern times, as they can capture the complexity of the system and emergent behaviors.