Multi-Agent Deep Reinforcement Learning for Integrated Demand Forecasting and Inventory Optimization in Sensor-Enabled Retail Supply Chains

Yongbin Yang, Mengdie Wang, Jiyuan Wang, Pan Li, Mengjie Zhou*

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

Abstract

The retail industry faces increasing challenges in matching supply with demand due to evolving consumer behaviors, market volatility, and supply chain disruptions. While existing approaches employ statistical and machine learning methods for demand forecasting, they often fail to capture complex temporal dependencies and lack the ability to simultaneously optimize inventory decisions. This paper proposes a novel multi-agent deep reinforcement learning framework that jointly optimizes demand forecasting and inventory management in retail supply chains, leveraging data from IoT sensors, RFID tracking systems, and smart shelf monitoring devices. Our approach combines transformer-based sequence modeling for demand patterns with hierarchical reinforcement learning agents that coordinate inventory decisions across distribution networks. The framework integrates both historical sales data and real-time sensor measurements, employing attention mechanisms to capture seasonal patterns, promotional effects, and environmental conditions detected through temperature and humidity sensors. Through extensive experiments on large-scale retail datasets incorporating sensor network data, we demonstrate that our method achieves 18.2% lower forecast error and 23.5% reduced stockout rates compared with state-of-the-art baselines. The results show particular improvements in handling promotional events and seasonal transitions, where traditional methods often struggle. Our work provides new insights into leveraging deep reinforcement learning for integrated retail operations optimization and offers a scalable solution for modern sensor-enabled supply chain challenges.
Original languageEnglish
Article number2428
Number of pages22
JournalSensors
Volume25
Issue number8
Early online date11 Apr 2025
DOIs
Publication statusE-pub ahead of print - 11 Apr 2025

Bibliographical note

Publisher Copyright:
© 2025 by the authors.

Keywords

  • inventory optimization
  • multi-agent reinforcement learning
  • demand forecasting
  • supply chain management

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