Paper detail

Reliability and Effectiveness of Autonomous AI Agents in Supply Chain Management

This paper studies autonomous generative AI agents in multi-echelon supply chains using the MIT Beer Game. We identify four inference-time levers that shape performance: model selection, policies and guardrails, centralized data sharing, and prompt engineering. Model capability is the dominant factor: an out-of-the-box reasoning model exceeds human-level performance, and optimized reasoning models reduce costs by up to 67% relative to human teams. However, strong average performance masks substantial reliability risks. We introduce the agent bullwhip effect, the amplification of decision unreliability across echelons, manifesting along two dimensions: decision variance increases both across facilities at the same point in time and within the same facility across time. We develop a mathematical framework showing that this phenomenon is inherent to multi-agent systems that involve coordination and information delays, and we demonstrate that repeated sampling fails to meaningfully reduce it. To address this limitation, we propose a Group Relative Policy Optimization (GRPO)-based reinforcement-learning post-training framework that trains a shared base LLM using system-level supply-chain rewards. GRPO post-training substantially reduces tail events, curtails agent bullwhip, and improves the reliability of autonomous supply-chain agents.