Ishai Menache

Beibin Li, Konstantina Mellou, Bo Zhang et al. · microsoft-research, uw

Supply chain operations traditionally involve a variety of complex decision making problems. Over the last few decades, supply chains greatly benefited from advances in computation, which allowed the transition from manual processing to automation and cost-effective optimization. Nonetheless, business operators still need to spend substantial efforts in explaining and interpreting the optimization outcomes to stakeholders. Motivated by the recent advances in Large Language Models (LLMs), we study how this disruptive technology can help bridge the gap between supply chain automation and human comprehension and trust thereof. We design OptiGuide -- a framework that accepts as input queries in plain text, and outputs insights about the underlying optimization outcomes. Our framework does not forgo the state-of-the-art combinatorial optimization technology, but rather leverages it to quantitatively answer what-if scenarios (e.g., how would the cost change if we used supplier B instead of supplier A for a given demand?). Importantly, our design does not require sending proprietary data over to LLMs, which can be a privacy concern in some circumstances. We demonstrate the effectiveness of our framework on a real server placement scenario within Microsoft's cloud supply chain. Along the way, we develop a general evaluation benchmark, which can be used to evaluate the accuracy of the LLM output in other scenarios.

Sean R. Sinclair, Felipe Frujeri, Ching-An Cheng et al.

Many resource management problems require sequential decision-making under uncertainty, where the only uncertainty affecting the decision outcomes are exogenous variables outside the control of the decision-maker. We model these problems as Exo-MDPs (Markov Decision Processes with Exogenous Inputs) and design a class of data-efficient algorithms for them termed Hindsight Learning (HL). Our HL algorithms achieve data efficiency by leveraging a key insight: having samples of the exogenous variables, past decisions can be revisited in hindsight to infer counterfactual consequences that can accelerate policy improvements. We compare HL against classic baselines in the multi-secretary and airline revenue management problems. We also scale our algorithms to a business-critical cloud resource management problem -- allocating Virtual Machines (VMs) to physical machines, and simulate their performance with real datasets from a large public cloud provider. We find that HL algorithms outperform domain-specific heuristics, as well as state-of-the-art reinforcement learning methods.

Yarin Perry, Felipe Vieira Frujeri, Chaim Hoch et al.

Routing is, arguably, the most fundamental task in computer networking, and the most extensively studied one. A key challenge for routing in real-world environments is the need to contend with uncertainty about future traffic demands. We present a new approach to routing under demand uncertainty: tackling this challenge as stochastic optimization, and employing deep learning to learn complex patterns in traffic demands. We show that our method provably converges to the global optimum in well-studied theoretical models of multicommodity flow. We exemplify the practical usefulness of our approach by zooming in on the real-world challenge of traffic engineering (TE) on wide-area networks (WANs). Our extensive empirical evaluation on real-world traffic and network topologies establishes that our approach's TE quality almost matches that of an (infeasible) omniscient oracle, outperforming previously proposed approaches, and also substantially lowers runtimes.

Beibin Li, Yi Zhang, Sébastien Bubeck et al. · microsoft-research, uw

We study the efficacy of Small Language Models (SLMs) in facilitating application usage through natural language interactions. Our focus here is on a particular internal application used in Microsoft for cloud supply chain fulfilment. Our experiments show that small models can outperform much larger ones in terms of both accuracy and running time, even when fine-tuned on small datasets. Alongside these results, we also highlight SLM-based system design considerations.

David Simchi-Levi, Konstantina Mellou, Ishai Menache et al.

Supply Chain Management requires addressing a variety of complex decision-making challenges, from sourcing strategies to planning and execution. Over the last few decades, advances in computation and information technologies have enabled the transition from manual, intuition and experience-based decision-making, into more automated and data-driven decisions using a variety of tools that apply optimization techniques. These techniques use mathematical methods to improve decision-making. Unfortunately, business planners and executives still need to spend considerable time and effort to (i) understand and explain the recommendations coming out of these technologies; (ii) analyze various scenarios and answer what-if questions; and (iii) update the mathematical models used in these tools to reflect current business environments. Addressing these challenges requires involving data science teams and/or the technology providers to explain results or make the necessary changes in the technology and hence significantly slows down decision making. Motivated by the recent advances in Large Language Models (LLMs), we report how this disruptive technology can democratize supply chain technology - namely, facilitate the understanding of tools' outcomes, as well as the interaction with supply chain tools without human-in-the-loop. Specifically, we report how we apply LLMs to address the three challenges described above, thus substantially reducing the time to decision from days and weeks to minutes and hours as well as dramatically increasing planners' and executives' productivity and impact.

Rui Ai, Hugo De Oliveira Barbalho, Sirui Li et al.

A common challenge in real-time operations is deciding whether to re-solve an optimization problem or continue using an existing solution. While modern data platforms may collect information at high frequencies, many real-time operations require repeatedly solving computationally intensive optimization problems formulated as Mixed-Integer Linear Programs (MILPs). Determining when to re-solve is, therefore, an economically important question. This problem poses several challenges: 1) How to characterize solution optimality and solving cost; 2) How to detect environmental changes and select beneficial samples for solving the MILP; 3) Given the large time horizon and non-MDP structure, vanilla reinforcement learning (RL) methods are not directly applicable and tend to suffer from value function explosion. Existing literature largely focuses on heuristics, low-data settings, and smooth objectives, with little focus on common NP-hard MILPs. We propose a framework called Proximal Policy Optimization with Change Point Detection (POC), which systematically offers a solution for balancing performance and cost when deciding appropriate re-solving times. Theoretically, we establish the relationship between the number of re-solves and the re-solving cost. To test our framework, we assemble eight synthetic and real-world datasets, and show that POC consistently outperforms existing baselines by 2%-17%. As a side benefit, our work fills the gap in the literature by introducing real-time MILP benchmarks and evaluation criteria.

Zeyi Chen, Xinzhi Zhang, Humishka Zope et al.

Mathematical programming -- the task of expressing operations and decision-making problems in precise mathematical language -- is fundamental across domains, yet remains a skill-intensive process requiring operations research expertise. Recent advances in large language models for complex reasoning have spurred interest in automating this task, translating natural language into executable optimization models. Current approaches, however, achieve limited accuracy, hindered by scarce and noisy training data without leveraging domain knowledge. In this work, we systematically integrate optimization expertise to improve formulation accuracy for mixed-integer linear programming, a key family of mathematical programs. Our approach first cleans training data through class-based error analysis to explicitly prevent common mistakes within each optimization class. We then develop multi-turn inference strategies that guide LLMs with class-specific error summaries and solver feedback, enabling iterative refinement. Experiments across multiple base LLMs demonstrate that combining cleaned data with domain-informed prompting and feedback improves formulation accuracy by 14 percentage points on average, enabling further progress toward robust LLM-assisted optimization formulation.