What is Inventory Optimization?

Inventory optimization aims to hold just enough stock to meet customer demand without tying up excess cash. It uses historical sales and demand signals to set reorder points. Unlike basic inventory management, optimization continuously adjusts stocking policies to maintain high service levels while avoiding overstock. Modern solutions incorporate AI to sense disruptions and demand volatility, enabling agile adjustments and real-time visibility across the supply chain. The result is freed working capital, lower carrying costs, and higher fill rates.