We investigate machine learning approaches for optimizing real-time staffing decisions in semi-automated warehouse sortation systems. Operational decision-making can be supported at different levels of abstraction, with different trade-offs. We evaluate two approaches, each in a matching simulation environment. First, we train custom Transformer-based policies using offline reinforcement learning on detailed historical state representations, achieving a 2.4% throughput improvement over historical baselines in learned simulators. In high-volume warehouse operations, improvements of this size translate to significant savings. Second, we explore LLMs operating on abstracted, human-readable state descriptions. These are a natural fit for decisions that warehouse managers make using high-level operational summaries. We systematically compare prompting techniques, automatic prompt optimization, and fine-tuning strategies. While prompting alone proves insufficient, supervised fine-tuning combined with Direct Preference Optimization on simulator-generated preferences achieves performance that matches or slightly exceeds historical baselines in a hand-crafted simulator. Our findings demonstrate that both approaches offer viable paths toward AI-assisted operational decision-making. Offline RL excels with task-specific architectures. LLMs support human-readable inputs and can be combined with an iterative feedback loop that can incorporate manager preferences.
Figures & tables
Figure 1: Predicted versus ground-truth output rates for the hand-crafted simulator. The data points cluster along the identity line (in red), which indicates that the simulator has been well-calibrated with no systematic over- or underprediction. R2=0.976 confirms that the simulator captures almost all of the variance in the ground-truth output.
Metric
Hand-crafted Simulator
Learned Simulator
Stage 1 Throughput
12.0%
20.0%
Stage 2 Throughput
12.1%
18.5%
Stage 3 (Total) Throughput
9.5%
15.8%
Buffer State 1
18.0%
7.2%
Buffer State 2
62.7%
25.6%
Buffer State 3
16.5%
6.7%
Table 1: The weighted average prediction errors of the learned simulator and the hand-crafted simulator. The hand-crafted simulator predicts the total throughput more accurately, whereas the learned simulator is superior at modeling the buffer states.
Figure 2: The TGNN architecture consists of repeated masked residual blocks. Each residual block integrates information along the stages, then between the lines, and finally across the time dimension.
Method
Throughput Improvement
95% CI
Offline Actor-Critic
+2.4%
[+2.3%, +2.6%]
Fine-Tuned Behavior Cloning
+2.1%
[+2.0%, +2.3%]
Behavior Cloning
+1.6%
[+1.4%, +1.8%]
Human Decisions (replayed)
0%
–
Table 2: Offline RL results in two internal learned simulators. Throughput improvement (percentage) is measured relative to replayed human decisions. Results are averaged over two different simulators to prevent overfitting to simulator-specific dynamics.
Figure 3: The learning curve for O ptimization by PRO mpting (OPRO). We see that the performance improves steadily before convergence.
Method
Throughput Improvement
95% CI
Automatic Prompt Optimization
OPRO + Self-Refine
-2.0%
[-2.3%, -1.8%]
Evolutionary Reflexion
-2.0%
[-2.3%, -1.7%]
Meta Agent Search
-2.7%
[-3.0%, -2.4%]
Hand-Crafted Prompting
Self-Refine
-2.1%
[-2.4%, -1.8%]
Table 3: Prompting and prompt optimization results in the hand-crafted simulator. Throughput improvement is measured relative to replayed human decisions.
Method
Throughput Improvement
95% CI
SFT + DPO (2 iterations)
+0.6%
[+0.5%, +0.7%]
SFT + DPO (1 iteration)
+0.3%
[+0.1%, +0.4%]
DPO only (2 iterations)
+0.0%
[-0.2%, +0.2%]
DPO only (1 iteration)
-0.4%
[-0.7%, -0.2%]
SFT only
-0.5%
[-0.6%, -0.4%]
Self-Refine (Qwen 32B)
-2.1%
[-2.4%, -1.8%]
Table 4: LLM results in hand-crafted simulator using Qwen2.5-14B-Instruct as the underlying model. Throughput improvement is measured relative to replayed human decisions.
We present an offline reinforcement learning (RL) framework for optimizing SLAM throughput control in a warehouse fulfillment environment. SLAM (Scan/Label/Apply/Manifest) throughput directly influences system congestion and operational efficiency. Our RL-based control approach dynamically recommends SLAM throughput settings that adaptively balance throughput maximization with downstream stability through intelligent adjustment of throttling behavior. We include a history-informed state representation, action space abstraction for delayed-impact control, and a reward function that captures both upstream and downstream operational metrics. Our approach is algorithm-agnostic, enabling integration of multiple offline RL methods under a unified architecture. We instantiate our framework with three state-of-the-art offline RL algorithms, and trained the models offline using de-identified historical operational logs from a large-scale warehouse. Policy performance is evaluated using a comprehensive multi-method strategy. These include model-free approaches including immediate reward estimation via regression models and long-horizon Fitted Q Evaluation (FQE), as well as model-based Deep Koopman dynamics evaluation. Empirical results reveal that the CQL policy consistently outperforms alternatives, improving system health by 22.97% and reducing average throttling duration by 3.18%. These findings demonstrate the potential of offline RL for safe and scalable warehouse throughput control optimization.
Tina Dongxu Li, Mouhacine Benosman, Rajat Kumar +3
Large language models (LLMs) have significant potential to improve operational efficiency in operations management. Deploying these models requires specifying a policy that governs response quality, shapes user experience, and influences operational value. In this research, we treat LLMs as stochastic simulators and propose a pairwise comparison-based adaptive simulation experiment framework for identifying the optimal policy from a finite set of candidates. We consider two policy spaces: an unstructured space with no parametric assumption, and a structured space in which the data are generated from a preference model. For both settings, we characterize the fundamental data requirements for identifying the optimal policy with high probability. In the unstructured case, we derive a closed-form expression for the optimal sampling proportions, together with a clear operational interpretation. In the structured case, we formulate a regularized convex program to compute the optimal proportions. We then develop an adaptive experimental procedure, termed LLM-PO, for both policy spaces, and prove that it identifies the optimal policy with the desired statistical guarantee while asymptotically attaining the fundamental data requirements. Numerical experiments demonstrate that LLM-PO consistently outperforms benchmark methods and improves LLM performance.
Mingjie Hu, Siyang Gao, Jian-qiang Hu +1
School of Management, Fudan University · H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology · Department of Systems Engineering, City University of Hong Kong
Service system performance depends on how participants respond to design choices, but modeling these responses is hard due to the complexity of human behavior. We introduce an LLM-powered multi-agent simulation (LLM-MAS) framework for optimizing service operations. We pose the problem as stochastic optimization with decision-dependent uncertainty: design choices are embedded in prompts and shape the distribution of outcomes from interacting LLM-powered agents. By embedding key numerical information in prompts and extracting it from LLM-generated text, we model this uncertainty as a controlled Markov chain. We develop an on-trajectory learning algorithm that, on a single simulation run, simultaneously constructs zeroth-order gradient estimates and updates design parameters to optimize steady-state performance. We also incorporate variance reduction techniques. In a sustainable supply chain application, our method outperforms benchmarks, including blackbox optimization and using LLMs as numerical solvers or as role-playing system designers. A case study on optimal contest design with real behavioral data shows that LLM-MAS is both as a cost-effective evaluator of known designs and an exploratory tool that can uncover strong designs overlooked by traditional approaches.
Yanyuan Wang, Xiaowei Zhang
Department of Industrial Engineering and Decision Analytics, The Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong SAR