Optimizing inventory procurement decisions
One of the most important decisions that almost all manufacturers, distributors, and retailers need to make, all the time, is how much inventory to carry to reliably satisfy the customer demand while minimizing the costs. Effective inventory management is key to the profitability and survival of most companies, especially given the razor-thin margins and increased customer expectations in today's competitive landscape. In this section, we use reinforcement learning to address this challenge and optimize inventory procurement decisions.
The need for inventory and the trade off in its management
When you walk into a supermarket, you see items stacked on top of each other. There are probably more of those items in the depot of the supermarket, and more at the warehouse of the distributors, and more at the sites of the manufacturers. If you think about it, there are those huge piles of products just sitting somewhere, waiting to be...
