Daily Papers

Inventory-policy comparisons are often difficult to interpret because performance depends on the evaluation contract as much as on the policy itself. Differences in topology, demand regime, information access, feasibility constraints, shortage treatment, and Key Performance Indicator (KPI) definitions can change method rankings. We present gym-invmgmt, a Gymnasium-compatible extension of the OR-Gym inventory-management lineage for auditable cross-paradigm evaluation. The benchmark evaluates optimization, heuristic, and learned controllers under a shared CoreEnv transition, reward, action-bound, and KPI contract, while varying stress conditions through a 22-scenario core grid plus four supplemental MARL-mode rows. Within these released scenarios, informed stochastic programming provides the strongest non-oracle reference, reflecting the value of scenario hedging under forecast access, but at substantially higher online computational cost. Among learned controllers, the Proximal Policy Optimization Transformer variant (PPO-Transformer) achieves the strongest learned-policy quality at fast inference, while Residual Reinforcement Learning (Residual RL) provides competitive hybrid performance. The graph neural network variant (PPO-GNN) is highly competitive on the default divergent topology but less robust on the serial topology. Imitation learning performs well in stationary regimes but degrades under demand shift, and the bounded Large Language Model (LLM) policy-parameter baseline is best interpreted as a diagnostic controller rather than an autonomous inventory optimizer. Overall, the benchmark identifies scenario-conditioned leaders while showing that performance depends jointly on information access, demand shift, topology, and policy representation.

Supply chain management (SCM) involves coordinating the flow of goods, information, and finances across various entities to deliver products efficiently. Effective inventory management is crucial in today's volatile and uncertain world. Previous research has demonstrated the superiority of heuristic methods and reinforcement learning applications in inventory management. However, the application of large language models (LLMs) as autonomous agents in multi-agent systems for inventory management remains underexplored. This study introduces a novel approach using LLMs to manage multi-agent inventory systems. Leveraging their zero-shot learning capabilities, our model, InvAgent, enhances resilience and improves efficiency across the supply chain network. Our contributions include utilizing LLMs for zero-shot learning to enable adaptive and informed decision-making without prior training, providing explainability and clarity through chain-of-thought, and demonstrating dynamic adaptability to varying demand scenarios while reducing costs and preventing stockouts. Extensive evaluations across different scenarios highlight the efficiency of our model in SCM.

This paper addresses a multi-echelon inventory management problem with a complex network topology where deriving optimal ordering decisions is difficult. Deep reinforcement learning (DRL) has recently shown potential in solving such problems, while designing the neural networks in DRL remains a challenge. In order to address this, a DRL model is developed whose Q-network is based on radial basis functions. The approach can be more easily constructed compared to classic DRL models based on neural networks, thus alleviating the computational burden of hyperparameter tuning. Through a series of simulation experiments, the superior performance of this approach is demonstrated compared to the simple base-stock policy, producing a better policy in the multi-echelon system and competitive performance in the serial system where the base-stock policy is optimal. In addition, the approach outperforms current DRL approaches.

We argue that inventory management presents unique opportunities for the reliable application of deep reinforcement learning (DRL). To enable this, we emphasize and test two complementary techniques. The first is Hindsight Differentiable Policy Optimization (HDPO), which uses pathwise gradients from offline counterfactual simulations to directly and efficiently optimize policy performance. Unlike standard policy gradient methods that rely on high-variance score-function estimators, HDPO computes gradients by differentiating through the known system dynamics. Via extensive benchmarking, we show that HDPO recovers near-optimal policies in settings with known or bounded optima, is more robust than variants of the REINFORCE algorithm, and significantly outperforms generalized newsvendor heuristics on problems using real time series data. Our second technique aligns neural policy architectures with the topology of the inventory network. We exploit Graph Neural Networks (GNNs) as a natural inductive bias for encoding supply chain structure, demonstrate that they can represent optimal and near-optimal policies in two theoretical settings, and empirically show that they reduce data requirements across six diverse inventory problems. A key obstacle to progress in this area is the lack of standardized benchmark problems. To address this gap, we open-source a suite of benchmark environments, along with our full codebase, to promote transparency and reproducibility. All resources are available at github.com/MatiasAlvo/Neural_inventory_control.

In the post-pandemic world, manufacturing enterprises face increasing uncertainties, especially with vulnerabilities in global supply chains. Although supply chain management has been extensively studied, the critical influence of decision-makers (DMs) in these systems remains underexplored. This study studies the inventory management problem under risk using the newsvendor model by incorporating DMs risk preferences. By employing the Quantum Monte Carlo (QMC) combined with Quantum Amplitude Estimation (QAE) algorithm, the estimation of probabilities or expectation values can be done more efficiently. This offers near-quadratic speedup compared to classical Monte Carlo methods. Our findings illuminate the intricate relationship between risk-aware decision-making and inventory management, providing essential insights for enhancing supply chain resilience and adaptability in uncertain conditions

Building extraction - needed for inventory management and planning of urban environment - is affected by the misalignment between labels and off-nadir source imagery in training data. Teacher-Student learning of noise-tolerant convolutional neural networks (CNNs) is the existing solution, but the Student networks typically have lower accuracy and cannot surpass the Teacher's performance. This paper proposes a supervised domain adaptation (SDA) of encoder-decoder networks (EDNs) between noisy and clean datasets to tackle the problem. EDNs are configured with high-performing lightweight encoders such as EfficientNet, ResNeSt, and MobileViT. The proposed method is compared against the existing Teacher-Student learning methods like knowledge distillation (KD) and deep mutual learning (DML) with three newly developed datasets. The methods are evaluated for different urban buildings (low-rise, mid-rise, high-rise, and skyscrapers), where misalignment increases with the increase in building height and spatial resolution. For a robust experimental design, 43 lightweight CNNs, five optimisers, nine loss functions, and seven EDNs are benchmarked to obtain the best-performing EDN for SDA. The SDA of the best-performing EDN from our study significantly outperformed KD and DML with up to 0.943, 0.868, 0.912, and 0.697 F1 scores in the low-rise, mid-rise, high-rise, and skyscrapers respectively. The proposed method and the experimental findings will be beneficial in training robust CNNs for building extraction.

This study investigates large language model (LLM) -based multi-agent systems (MASs) as a promising approach to inventory management, which is a key component of supply chain management. Although these systems have gained considerable attention for their potential to address the challenges associated with typical inventory management methods, key uncertainties regarding their effectiveness persist. Specifically, it is unclear whether LLM-based MASs can consistently derive optimal ordering policies and adapt to diverse supply chain scenarios. To address these questions, we examine an LLM-based MAS with a fixed-ordering strategy prompt that encodes the stepwise processes of the problem setting and a safe-stock strategy commonly used in inventory management. Our empirical results demonstrate that, even without detailed prompt adjustments, an LLM-based MAS can determine optimal ordering decisions in a restricted scenario. To enhance adaptability, we propose a novel agent called AIM-RM, which leverages similar historical experiences through similarity matching. Our results show that AIM-RM outperforms benchmark methods across various supply chain scenarios, highlighting its robustness and adaptability.

Data-driven optimization uses contextual information and machine learning algorithms to find solutions to decision problems with uncertain parameters. While a vast body of work is dedicated to interpreting machine learning models in the classification setting, explaining decision pipelines involving learning algorithms remains unaddressed. This lack of interpretability can block the adoption of data-driven solutions as practitioners may not understand or trust the recommended decisions. We bridge this gap by introducing a counterfactual explanation methodology tailored to explain solutions to data-driven problems. We introduce two classes of explanations and develop methods to find nearest explanations of random forest and nearest-neighbor predictors. We demonstrate our approach by explaining key problems in operations management such as inventory management and routing.

Simulation-based optimization is a widely used method to solve stochastic optimization problems. This method aims to identify an optimal solution by maximizing the expected value of the objective function. However, due to its computational complexity, the function cannot be accurately evaluated directly, hence it is estimated through simulation. Exploiting the enhanced efficiency of Quantum Amplitude Estimation (QAE) compared to classical Monte Carlo simulation, it frequently outpaces classical simulation-based optimization, resulting in notable performance enhancements in various scenarios. In this work, we make use of a quantum-enhanced algorithm for simulation-based optimization and apply it to solve a variant of the classical Newsvendor problem which is known to be NP-hard. Such problems provide the building block for supply chain management, particularly in inventory management and procurement optimization under risks and uncertainty

Digitization of scanned Piping and Instrumentation diagrams(P&ID), widely used in manufacturing or mechanical industries such as oil and gas over several decades, has become a critical bottleneck in dynamic inventory management and creation of smart P&IDs that are compatible with the latest CAD tools. Historically, P&ID sheets have been manually generated at the design stage, before being scanned and stored as PDFs. Current digitization initiatives involve manual processing and are consequently very time consuming, labour intensive and error-prone.Thanks to advances in image processing, machine and deep learning techniques there are emerging works on P&ID digitization. However, existing solutions face several challenges owing to the variation in the scale, size and noise in the P&IDs, sheer complexity and crowdedness within drawings, domain knowledge required to interpret the drawings. This motivates our current solution called Digitize-PID which comprises of an end-to-end pipeline for detection of core components from P&IDs like pipes, symbols and textual information, followed by their association with each other and eventually, the validation and correction of output data based on inherent domain knowledge. A novel and efficient kernel-based line detection and a two-step method for detection of complex symbols based on a fine-grained deep recognition technique is presented in the paper. In addition, we have created an annotated synthetic dataset, Dataset-P&ID, of 500 P&IDs by incorporating different types of noise and complex symbols which is made available for public use (currently there exists no public P&ID dataset). We evaluate our proposed method on this synthetic dataset and a real-world anonymized private dataset of 12 P&ID sheets. Results show that Digitize-PID outperforms the existing state-of-the-art for P&ID digitization.

Panoptic segmentation is the combination of semantic and instance segmentation: assign the points in a 3D point cloud to semantic categories and partition them into distinct object instances. It has many obvious applications for outdoor scene understanding, from city mapping to forest management. Existing methods struggle to segment nearby instances of the same semantic category, like adjacent pieces of street furniture or neighbouring trees, which limits their usability for inventory- or management-type applications that rely on object instances. This study explores the steps of the panoptic segmentation pipeline concerned with clustering points into object instances, with the goal to alleviate that bottleneck. We find that a carefully designed clustering strategy, which leverages multiple types of learned point embeddings, significantly improves instance segmentation. Experiments on the NPM3D urban mobile mapping dataset and the FOR-instance forest dataset demonstrate the effectiveness and versatility of the proposed strategy.

Inventory Routing Problem (IRP) is a crucial challenge in supply chain management as it involves optimizing efficient route selection while considering the uncertainty of inventory demand planning. To solve IRPs, usually a two-stage approach is employed, where demand is predicted using machine learning techniques first, and then an optimization algorithm is used to minimize routing costs. Our experiment shows machine learning models fall short of achieving perfect accuracy because inventory levels are influenced by the dynamic business environment, which, in turn, affects the optimization problem in the next stage, resulting in sub-optimal decisions. In this paper, we formulate and propose a decision-focused learning-based approach to solving real-world IRPs. This approach directly integrates inventory prediction and routing optimization within an end-to-end system potentially ensuring a robust supply chain strategy.

Detailed forest inventories are critical for sustainable and flexible management of forest resources, to conserve various ecosystem services. Modern airborne laser scanners deliver high-density point clouds with great potential for fine-scale forest inventory and analysis, but automatically partitioning those point clouds into meaningful entities like individual trees or tree components remains a challenge. The present study aims to fill this gap and introduces a deep learning framework, termed ForAINet, that is able to perform such a segmentation across diverse forest types and geographic regions. From the segmented data, we then derive relevant biophysical parameters of individual trees as well as stands. The system has been tested on FOR-Instance, a dataset of point clouds that have been acquired in five different countries using surveying drones. The segmentation back-end achieves over 85% F-score for individual trees, respectively over 73% mean IoU across five semantic categories: ground, low vegetation, stems, live branches and dead branches. Building on the segmentation results our pipeline then densely calculates biophysical features of each individual tree (height, crown diameter, crown volume, DBH, and location) and properties per stand (digital terrain model and stand density). Especially crown-related features are in most cases retrieved with high accuracy, whereas the estimates for DBH and location are less reliable, due to the airborne scanning setup.

This paper sets forth a framework for deep reinforcement learning as applied to market making (DRLMM) for cryptocurrencies. Two advanced policy gradient-based algorithms were selected as agents to interact with an environment that represents the observation space through limit order book data, and order flow arrival statistics. Within the experiment, a forward-feed neural network is used as the function approximator and two reward functions are compared. The performance of each combination of agent and reward function is evaluated by daily and average trade returns. Using this DRLMM framework, this paper demonstrates the effectiveness of deep reinforcement learning in solving stochastic inventory control challenges market makers face.

Online allocation problems with resource constraints are central problems in revenue management and online advertising. In these problems, requests arrive sequentially during a finite horizon and, for each request, a decision maker needs to choose an action that consumes a certain amount of resources and generates reward. The objective is to maximize cumulative rewards subject to a constraint on the total consumption of resources. In this paper, we consider a data-driven setting in which the reward and resource consumption of each request are generated using an input model that is unknown to the decision maker. We design a general class of algorithms that attain good performance in various input models without knowing which type of input they are facing. In particular, our algorithms are asymptotically optimal under independent and identically distributed inputs as well as various non-stationary stochastic input models, and they attain an asymptotically optimal fixed competitive ratio when the input is adversarial. Our algorithms operate in the Lagrangian dual space: they maintain a dual multiplier for each resource that is updated using online mirror descent. By choosing the reference function accordingly, we recover the dual sub-gradient descent and dual multiplicative weights update algorithm. The resulting algorithms are simple, fast, and do not require convexity in the revenue function, consumption function and action space, in contrast to existing methods for online allocation problems. We discuss applications to network revenue management, online bidding in repeated auctions with budget constraints, online proportional matching with high entropy, and personalized assortment optimization with limited inventory.

The availability of performant pre-trained models has led to a proliferation of fine-tuned expert models that are specialized to a particular domain or task. Model MoErging methods aim to recycle expert models to create an aggregate system with improved performance or generalization. A key component of MoErging methods is the creation of a router that decides which expert model(s) to use for a particular input or application. The promise, effectiveness, and large design space of MoErging has spurred the development of many new methods over the past few years. This rapid pace of development has made it challenging to compare different MoErging methods, which are rarely compared to one another and are often validated in different experimental setups. To remedy such gaps, we present a comprehensive survey of MoErging methods that includes a novel taxonomy for cataloging key design choices and clarifying suitable applications for each method. Apart from surveying MoErging research, we inventory software tools and applications that make use of MoErging. We additionally discuss related fields of study such as model merging, multitask learning, and mixture-of-experts models. Taken as a whole, our survey provides a unified overview of existing MoErging methods and creates a solid foundation for future work in this burgeoning field.

While Large Language Models (LLMs) can exhibit impressive proficiency in isolated, short-term tasks, they often fail to maintain coherent performance over longer time horizons. In this paper, we present Vending-Bench, a simulated environment designed to specifically test an LLM-based agent's ability to manage a straightforward, long-running business scenario: operating a vending machine. Agents must balance inventories, place orders, set prices, and handle daily fees - tasks that are each simple but collectively, over long horizons (>20M tokens per run) stress an LLM's capacity for sustained, coherent decision-making. Our experiments reveal high variance in performance across multiple LLMs: Claude 3.5 Sonnet and o3-mini manage the machine well in most runs and turn a profit, but all models have runs that derail, either through misinterpreting delivery schedules, forgetting orders, or descending into tangential "meltdown" loops from which they rarely recover. We find no clear correlation between failures and the point at which the model's context window becomes full, suggesting that these breakdowns do not stem from memory limits. Apart from highlighting the high variance in performance over long time horizons, Vending-Bench also tests models' ability to acquire capital, a necessity in many hypothetical dangerous AI scenarios. We hope the benchmark can help in preparing for the advent of stronger AI systems.

Open time-series forecasting (TSF) benchmarks cover retail, energy, weather, and traffic, but supply-chain logistics remains underserved. We introduce ISOMORPH, the first public digital twin of a multi-echelon logistics network with fully interpretable, user-configurable parameters and modular topology, demand process, and control rules. The simulator advances a directed routing graph in discrete time: demand arrives at the destination, is served from stock or recorded as backlog, and triggers replenishment through the network. The state vector tracks per-node on-hand inventory with outstanding orders, in-transit shipments, and a smoothed demand estimate, so the dynamics close as a Markov chain on a tractable state space whose transition kernel acts linearly on the empirical distribution of the state. The released data reproduces the bullwhip effect at empirically consistent magnitudes, and three conservation laws encoded in the Markov chain serve as verification tools when users extend the simulator. We release datasets at two catalogue scales (C=50 and C=200) with six scenario sweeps producing 30 additional rollouts and 20 Latin-hypercube perturbations, exhibiting dynamics absent from fixed TSF benchmarks: variance amplification, cascading bottlenecks, regime shifts, and cross-channel coupling through shared macro shocks. Zero-shot evaluation of four foundation models (Chronos, Moirai, TimesFM, Lag-Llama) shows MASE values exceeding public GIFT-Eval references at low-to-moderate horizons, supporting incorporation into existing benchmarks. The same pairing produces forecast confidence bands via Latin-hypercube perturbation of demand-side knobs, forward UQ from parameter uncertainty unavailable on standard TSF datasets, demonstrating that foundation models can serve as fast surrogates for the digital twin's forward UQ. Code (MIT): https://github.com/tuhinsahai/ISOMORPH.

This paper presents Post-Decision Proximal Policy Optimization (PDPPO), a novel variation of the leading deep reinforcement learning method, Proximal Policy Optimization (PPO). The PDPPO state transition process is divided into two steps: a deterministic step resulting in the post-decision state and a stochastic step leading to the next state. Our approach incorporates post-decision states and dual critics to reduce the problem's dimensionality and enhance the accuracy of value function estimation. Lot-sizing is a mixed integer programming problem for which we exemplify such dynamics. The objective of lot-sizing is to optimize production, delivery fulfillment, and inventory levels in uncertain demand and cost parameters. This paper evaluates the performance of PDPPO across various environments and configurations. Notably, PDPPO with a dual critic architecture achieves nearly double the maximum reward of vanilla PPO in specific scenarios, requiring fewer episode iterations and demonstrating faster and more consistent learning across different initializations. On average, PDPPO outperforms PPO in environments with a stochastic component in the state transition. These results support the benefits of using a post-decision state. Integrating this post-decision state in the value function approximation leads to more informed and efficient learning in high-dimensional and stochastic environments.

Advancement in information and communication technology (ICT) has given rise to explosion of data in every field of operations. Working with the enormous volume of data (or Big Data, as it is popularly known as) for extraction of useful information to support decision making is one of the sources of competitive advantage for organizations today. Enterprises are leveraging the power of analytics in formulating business strategy in every facet of their operations to mitigate business risk. Volatile global market scenario has compelled the organizations to redefine their supply chain management (SCM). In this paper, we have delineated the relevance of Big Data and its importance in managing end to end supply chains for achieving business excellence. A Big Data-centric architecture for SCM has been proposed that exploits the current state of the art technology of data management, analytics and visualization. The security and privacy requirements of a Big Data system have also been highlighted and several mechanisms have been discussed to implement these features in a real world Big Data system deployment in the context of SCM. Some future scope of work has also been pointed out. Keyword: Big Data, Analytics, Cloud, Architecture, Protocols, Supply Chain Management, Security, Privacy.

Supply chain operations traditionally involve a variety of complex decision making problems. Over the last few decades, supply chains greatly benefited from advances in computation, which allowed the transition from manual processing to automation and cost-effective optimization. Nonetheless, business operators still need to spend substantial efforts in explaining and interpreting the optimization outcomes to stakeholders. Motivated by the recent advances in Large Language Models (LLMs), we study how this disruptive technology can help bridge the gap between supply chain automation and human comprehension and trust thereof. We design -- a framework that accepts as input queries in plain text, and outputs insights about the underlying optimization outcomes. Our framework does not forgo the state-of-the-art combinatorial optimization technology, but rather leverages it to quantitatively answer what-if scenarios (e.g., how would the cost change if we used supplier B instead of supplier A for a given demand?). Importantly, our design does not require sending proprietary data over to LLMs, which can be a privacy concern in some circumstances. We demonstrate the effectiveness of our framework on a real server placement scenario within Microsoft's cloud supply chain. Along the way, we develop a general evaluation benchmark, which can be used to evaluate the accuracy of the LLM output in other scenarios.

Portfolio Management is the process of overseeing a group of investments, referred to as a portfolio, with the objective of achieving predetermined investment goals. Portfolio optimization is a key component that involves allocating the portfolio assets so as to maximize returns while minimizing risk taken. It is typically carried out by financial professionals who use a combination of quantitative techniques and investment expertise to make decisions about the portfolio allocation. Recent applications of Deep Reinforcement Learning (DRL) have shown promising results when used to optimize portfolio allocation by training model-free agents on historical market data. Many of these methods compare their results against basic benchmarks or other state-of-the-art DRL agents but often fail to compare their performance against traditional methods used by financial professionals in practical settings. One of the most commonly used methods for this task is Mean-Variance Portfolio Optimization (MVO), which uses historical time series information to estimate expected asset returns and covariances, which are then used to optimize for an investment objective. Our work is a thorough comparison between model-free DRL and MVO for optimal portfolio allocation. We detail the specifics of how to make DRL for portfolio optimization work in practice, also noting the adjustments needed for MVO. Backtest results demonstrate strong performance of the DRL agent across many metrics, including Sharpe ratio, maximum drawdowns, and absolute returns.

Robotics and automation are increasingly influential in logistics but remain largely confined to traditional warehouses. In grocery retail, advancements such as cashier-less supermarkets exist, yet customers still manually pick and pack groceries. While there has been a substantial focus in robotics on the bin picking problem, the task of packing objects and groceries has remained largely untouched. However, packing grocery items in the right order is crucial for preventing product damage, e.g., heavy objects should not be placed on top of fragile ones. However, the exact criteria for the right packing order are hard to define, in particular given the huge variety of objects typically found in stores. In this paper, we introduce LLM-Pack, a novel approach for grocery packing. LLM-Pack leverages language and vision foundation models for identifying groceries and generating a packing sequence that mimics human packing strategy. LLM-Pack does not require dedicated training to handle new grocery items and its modularity allows easy upgrades of the underlying foundation models. We extensively evaluate our approach to demonstrate its performance. We will make the source code of LLMPack publicly available upon the publication of this manuscript.