Inventory Optimization Using an AI-Powered Holistic Model for Decision-Support System

Abstract

Abstract: This study presents a groundbreaking approach to inventory optimization through the implementation of an AIpowered holistic model within a decision-support system. Leveraging machine learning algorithms, specifically Logistic Regression (LR) and Decision Trees, the methodology explores historical sales data, supplier metrics, and market trends during an extensive Exploratory Data Analysis phase. The implementation of an AI-powered holistic model for inventory optimization in a decision-support system presents a transformative approach to managing and enhancing supply chain efficiency. The proposed methodology, integrating machine learning algorithms such as Logistic Regression and Decision Trees, has demonstrated its efficacy in achieving superior results compared to traditional models, as evidenced by higher accuracy, precision, recall, and F1 scores. The comprehensive exploration of historical sales data, supplier metrics, and market trends during the exploratory data analysis phase has facilitated a nuanced understanding of inventory dynamics. The seamless integration of the AI-powered model into the decision-support system has empowered organizations with timely and data-driven insights, fostering more agile and informed decision-making. The seamless integration of the AI-powered model into the decision-support system provides organizations with timely and data-driven insights, fostering agile and informed decisionmaking. Performance evaluation, including accuracy, precision, recall, and F1 scores, reveals that the proposed LR and Decision Tree models outperform the existing Support Vector Machine (SVM) model across all metrics. The LR model exhibits commendable precision, recall, and F1 score values of 0.95, 0.97, and 0.98, respectively, while the Decision Tree model demonstrates even higher values, with precision and recall at 0.96 and an exceptionally high F1 score of 0.99. These outcomes underscore the practical utility and robustness of the AI-powered holistic model in revolutionizing inventory management practices. While acknowledging challenges and limitations, this research signifies a crucial advancement in establishing responsive and intelligent decision-support systems for inventory optimization, paving the way for future innovations in supply chain management