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Market engineering comprises the structured, systematic and theoretically founded procedure of analyzing, designing, introducing and also quality assuring of markets as well as their legal framework regarding simultaneously their market mechanisms and trading rules, systems, platforms and media, and their business models. In this context, term market stands for a set of rules defining the exchange of information between participants to conduct transactions at minimized cost. [1] Market Engineering borrows concepts and methods from Economics, particularly, Game Theory, and Mechanism Design concepts, but also borrows concepts from Finance, Information Systems and Operations Research. It finds particular application in the context of electronic market platforms. [2]
The Market Engineering Framework takes into account the various aspects of market engineering. The Market Engineering Framework diagram depicts the building blocks that form the framework. The framework operates in the economic and legal environment in which it is situated. This effects the operations of all other portions of the framework. The transaction object represents the interface between market operators and the individual components of the market (market microstructure, IT-infrastructure and the business infrastructure) (Weinhardt et al. 2003, Neumann 2004).
The market engineering approach is structured by means of a process as depicted in Market Engineering Process diagram. Taking into account the objectives of the new electronic markets, the requirements of the new electronic market are deduced in the first stage. Subsequently, the new market is designed with simultaneous consideration of the transaction object, the market microstructure, the IT infrastructure, and the business model. In the third stage, the mechanism is tested on its technical, economic and business properties. If needed, there is an iteration loop between designing and evaluating the market in order to make sure that the requirements are met. In the fourth stage, the thoroughly evaluated design is realized and implemented as a software system. Finally, the market platform is introduced. At any stage of the market engineering process, there is a decision whether to proceed with the next step or to repeat an earlier one.
The objective of the environmental analysis is to formalize the strategies and objectives of a new electronic market. The stage comprises two phases: the environment definition and the requirement analysis. The goal of the environment definition is to characterize the economic environment for which the market is to be engineered. This phase comprises the collection and analysis of potential trading objects, market segments, and agents that may interact on a particular segment. On the basis of this analysis, potential market segments for trading these resources are identified and evaluated comparatively. Having selected a target market, information about potential agents is determined. The target market reveals the economic environment for which the market is intended. The requirement analysis consists of a thorough extraction of these needs concerning the resource allocation problem and the environmental side constraints. On the basis of the requirement analysis, the market engineer decides whether to engineer a new mechanism from scratch or to reuse and adapt an existing one for the target problem. This decision is usually supported by a literature review, surveys, a SWOT analysis, and interviews with future market participants. The output of stage 1 is a list with all requirements.
The second stage of the process comprises the design of the market with simultaneous consideration of the transaction object, the market microstructure, the IT infrastructure, and the business model. Supported by different tools and methodologies such as mechanism and parametric design the market mechanism is deduced as an allocation and payment function. For designing the IT infrastructure in order to e.g. ensure computational tractability we rely on methods from computer science. We provide different tools that assist the engineer in designing markets. For instance, the market engineer can rely on the generic market system meet2trade that supports different auction mechanisms and negotiation schemes (Weinhardt et al. 2006). The result of stage 2 is a conceptual model of the market system to be evaluated and implemented.
Having designed the market, it is tested upon its technical and economic properties. The evaluation stage comprises functionality tests of a software prototype to ensure its correctness, economic tests to measure the outcome performance of the market, and an assessment of the business model. Functionality tests are made to ensure that the prototype system works as it is designed. In other words, these tests ensure that the system correctly reflects the institutional rules. The objective of the economic tests is to ascertain whether or not the electronic market attains the desired economic outcome. This phase is supported by analytical and experimental evaluation methods. Experimental methods consist of laboratory experiments, numerical simulations, or agent-based simulations. Tools for this kind of evaluation are e.g. ZTree, Repast, MES and AMASE as part of the meet2trade system and the simulation tool jCASE . After functional and economic tests are performed, additional pilot runs with the software prototype are made. These runs provide information about the agents’ acceptance of the market and, if necessary, allow the engineer to adjust the underlying institutional rules or the prototype system.
In this stage, the thoroughly evaluated design is realized and implemented as a software system. The market system can either be implemented from scratch or the prototype developed in the evaluation stage can be enhanced in an evolutionary process. This phase is supported by traditional software engineering concepts and tools, such as UML, design patterns, or the Rational Unified Process. The output of this phase is a fully implemented electronic market with the institutional rules and the business model.
In the last stage of the process, the electronic market is introduced. The introduction of the electronic market initiates its operation cycle.
The Computer-Aided Market Engineering (CAME) tool suite meet2trade showcases a service engineering approach to the development of electronic markets as a service offering (Weinhardt et al. 2006, Neumann et al. 2005). For e-markets, the market operator—as service provider decides the following prerequisites that characterize the complex service: the products that will be traded; the market rules to match demand and supply; the IT infrastructure of the trading platform; the business structure trefies defining the value proposition; and the business model to derive revenue from the service offering.
The CAME tool suite provides a conceptual framework for designing e-markets, a process model to guide the design, and methods and tools supporting these design steps. These tasks are inherently interdisciplinary. The strategic task of defining the segment, in which the e-market is intended to operate, is primarily a management and marketing endeavor. The design of the market mechanisms that describe the flow of the negotiation process, pertains to economics. Implementing the market mechanisms as a running service system is mainly a software engineering task.
The CAME approach extends state-of-the-art methods, as it tackles all problems associated with the design of e-markets holistically. For example, Knowledge-based Auction Design Support (KADS) enables the market operator to decide on the principal auction format. Auction Runtime Environment (ARTE) and Adaptive Client (AC) support the transformation of the concept into an instantiation of a running auction format, supporting embodiment and detail design. Lastly, Agent-based Simulation Environment (AMASE) and Experimental System (MES) provide extensive testing functionalities. Prototypes can be generated and tested on-the-fly, improving the design process considerably.
This research work focuses on how to design and operate market services, how to gain knowledge for this task, and how to provide this knowledge to those who need to set up auctions, exchanges, or e-procurement platforms. CAME epitomizes an SSME approach and meet2trade workbench showcases an integrated outcome of service sciences, management, and engineering.
A prototype is an early sample, model, or release of a product built to test a concept or process. It is a term used in a variety of contexts, including semantics, design, electronics, and software programming. A prototype is generally used to evaluate a new design to enhance precision by system analysts and users. Prototyping serves to provide specifications for a real, working system rather than a theoretical one. In some design workflow models, creating a prototype is the step between the formalization and the evaluation of an idea.
In business and engineering, product development or new product development covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along with various business considerations. New product development is described broadly as the transformation of a market opportunity into a product available for sale. The products developed by an organisation provide the means for it to generate income. For many technology-intensive firms their approach is based on exploiting technological innovation in a rapidly changing market.
The rational unified process (RUP) is an iterative software development process framework created by the Rational Software Corporation, a division of IBM since 2003. RUP is not a single concrete prescriptive process, but rather an adaptable process framework, intended to be tailored by the development organizations and software project teams that will select the elements of the process that are appropriate for their needs. RUP is a specific implementation of the Unified Process.
Software development is the process of conceiving, specifying, designing, programming, documenting, testing, and bug fixing involved in creating and maintaining applications, frameworks, or other software components. Software development involves writing and maintaining the source code, but in a broader sense, it includes all processes from the conception of the desired software through the final manifestation, typically in a planned and structured process often overlapping with software engineering. Software development also includes research, new development, prototyping, modification, reuse, re-engineering, maintenance, or any other activities that result in software products.
A modeling language is any artificial language that can be used to express information or knowledge or systems in a structure that is defined by a consistent set of rules. The rules are used for interpretation of the meaning of components in the structure Programing language.
Automotive engineering, along with aerospace engineering and naval architecture, is a branch of vehicle engineering, incorporating elements of mechanical, electrical, electronic, software, and safety engineering as applied to the design, manufacture and operation of motorcycles, automobiles, and trucks and their respective engineering subsystems. It also includes modification of vehicles. Manufacturing domain deals with the creation and assembling the whole parts of automobiles is also included in it. The automotive engineering field is research intensive and involves direct application of mathematical models and formulas. The study of automotive engineering is to design, develop, fabricate, and test vehicles or vehicle components from the concept stage to production stage. Production, development, and manufacturing are the three major functions in this field.
The following outline is provided as an overview of and topical guide to software engineering:
Computer-aided engineering can be defined as the general usage of technology to aid in tasks related to engineering analysis. Any use of technology to solve or assist engineering issues falls under this umbrella.
In systems engineering and software engineering, requirements analysis focuses on the tasks that determine the needs or conditions to meet the new or altered product or project, taking account of the possibly conflicting requirements of the various stakeholders, analyzing, documenting, validating and managing software or system requirements.
In systems engineering, information systems and software engineering, the systems development life cycle (SDLC), also referred to as the application development life cycle, is a process for planning, creating, testing, and deploying an information system. The SDLC concept applies to a range of hardware and software configurations, as a system can be composed of hardware only, software only, or a combination of both. There are usually six stages in this cycle: requirement analysis, design, development and testing, implementation, documentation, and evaluation.
In industry, product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its inception through the engineering, design and manufacture, as well as the service and disposal of manufactured products. PLM integrates people, data, processes, and business systems and provides a product information backbone for companies and their extended enterprises.
Software prototyping is the activity of creating prototypes of software applications, i.e., incomplete versions of the software program being developed. It is an activity that can occur in software development and is comparable to prototyping as known from other fields, such as mechanical engineering or manufacturing.
A software factory is a structured collection of related software assets that aids in producing computer software applications or software components according to specific, externally defined end-user requirements through an assembly process. A software factory applies manufacturing techniques and principles to software development to mimic the benefits of traditional manufacturing. Software factories are generally involved with outsourced software creation.
In manufacturing and design, a mockup, or mock-up, is a scale or full-size model of a design or device, used for teaching, demonstration, design evaluation, promotion, and other purposes. A mockup may be a prototype if it provides at least part of the functionality of a system and enables testing of a design. Mock-ups are used by designers mainly to acquire feedback from users. Mock-ups address the idea captured in a popular engineering one-liner: "You can fix it now on the drafting board with an eraser or you can fix it later on the construction site with a sledge hammer".
Keyword-driven testing, also known as action word based testing, is a software testing methodology suitable for both manual and automated testing. This method separates the documentation of test cases – including both the data and functionality to use – from the prescription of the way the test cases are executed. As a result, it separates the test creation process into two distinct stages: a design and development stage, and an execution stage. The design substage covers the requirement analysis and assessment and the data analysis, definition, and population.
Model-based design (MBD) is a mathematical and visual method of addressing problems associated with designing complex control, signal processing and communication systems. It is used in many motion control, industrial equipment, aerospace, and automotive applications. Model-based design is a methodology applied in designing embedded software.
Digital Prototyping gives conceptual design, engineering, manufacturing, and sales and marketing departments the ability to virtually explore a complete product before it's built. Industrial designers, manufacturers, and engineers use Digital Prototyping to design, iterate, optimize, validate, and visualize their products digitally throughout the product development process. Innovative digital prototypes can be created via CAutoD through intelligent and near-optimal iterations, meeting multiple design objectives, identifying multiple figures of merit, and reducing development gearing and time-to-market. Marketers also use Digital Prototyping to create photorealistic renderings and animations of products prior to manufacturing. Companies often adopt Digital Prototyping with the goal of improving communication between product development stakeholders, getting products to market faster, and facilitating product innovation.
In software engineering, a software development process is a process of planning and managing software development. It typically involves dividing software development work into smaller, parallel, or sequential steps or sub-processes to improve design and/or product management. It is also known as a software development life cycle (SDLC). The methodology may include the pre-definition of specific deliverables and artifacts that are created and completed by a project team to develop or maintain an application.