Why Inventory Quantity and Location Should Be Optimized as Separate Problems
C3.ai, Wednesday, July 22nd, 2026
C3 AI argues inventory quantity and placement are distinct problems best optimized separately for better outcomes.
C3 AI argues that inventory management should be decoupled into two separate optimization problems.
Determining inventory quantities is a data problem best solved with AI-driven stochastic optimization and frequent updates, while deciding where to position inventory is a physical problem needing less frequent strategic decisions. Separating the concerns yields clearer team ownership, faster disruption response, and improved accuracy.
A global welding equipment manufacturer case study identified a potential $10 million inventory reduction while improving material availability.