An empirically grounded analytical approach to hog farm finishing stage management: Deep reinforcement learning as decision support and managerial learning tool

Abstract In hog farming, optimizing hog sales is a complex challenge due to uncertain factors, such as hog availability, market prices, and operating costs. This study uses a Markov Decision Process (MDP) to model these decisions, revealing the importance of the final weeks in profit management. The MDP's intractability due to the curse of dimensionality leads us to employ Deep Reinforcement Learning (DRL) for optimization. Using real‐world and synthetic data, our DRL model outperforms existing practices. However, it lacks interpretability, hindering trust and legal compliance in the food industry. To address this, we introduce “managerial learning,” extracting actionable insights from DRL outputs using classification trees that would have been difficult to obtain otherwise. We leverage these insights to devise a smart heuristic that significantly beats the heuristic currently used in practice. This study has broader implications for operations management, where DRL can solve complex dynamic optimization problems that are often intractable due to dimensionality. By applying methods, such as classification trees and DRL, one can scrutinize solutions for actionable managerial insights that can enhance existing practices with straightforward planning guidelines.

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Publication Details

Journal
Journal of Operations Management
Published
2024-12-18
DOI
https://doi.org/10.1002/joom.1342
Citations
3
Primary Topic
Evolutionary Algorithms and Applications
Type
article
Field-Weighted Citation Impact
1.04
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article

An empirically grounded analytical approach to hog farm finishing stage management: Deep reinforcement learning as decision support and managerial learning tool

Panos Kouvelis, Danko Turcic, Ye Liu
3 citations
Journal of Operations Management
Evolutionary Algorithms and Applications
1.04
article

An empirically grounded analytical approach to hog farm finishing stage management: Deep reinforcement learning as decision support and managerial learning tool

Panos Kouvelis, Danko Turcic, Ye Liu
article en
3 citations

Abstract

Abstract In hog farming, optimizing hog sales is a complex challenge due to uncertain factors, such as hog availability, market prices, and operating costs. This study uses a Markov Decision Process (MDP) to model these decisions, revealing the importance of the final weeks in profit management. The MDP's intractability due to the curse of dimensionality leads us to employ Deep Reinforcement Learning (DRL) for optimization. Using real‐world and synthetic data, our DRL model outperforms existing practices. However, it lacks interpretability, hindering trust and legal compliance in the food industry. To address this, we introduce “managerial learning,” extracting actionable insights from DRL outputs using classification trees that would have been difficult to obtain otherwise. We leverage these insights to devise a smart heuristic that significantly beats the heuristic currently used in practice. This study has broader implications for operations management, where DRL can solve complex dynamic optimization problems that are often intractable due to dimensionality. By applying methods, such as classification trees and DRL, one can scrutinize solutions for actionable managerial insights that can enhance existing practices with straightforward planning guidelines.

Journal of Operations ManagementVol. 71(4)
University of California, Riverside (US), Washington University in St. Louis (US), Syracuse University (US)
Openalex Percentile: Top 18%
Evolutionary Algorithms and Applications
1.04
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An empirically grounded analytical approach to hog farm finishing stage management: Deep reinforcement learning as decision support and managerial learning tool — Panos Kouvelis, Danko Turcic, et al. · Journal of Operations Management (2024) | TGRS Research Map | TGRS