Inventory Optimization: Models and Simulations

by Nicolas Vandeput

In this book . . . Nicolas Vandeput hacks his way through the maze of quantitative supply chain optimizations. This book illustrates how the quantitative optimization of 21st century supply chains should be crafted and executed. . . . Vandeput is at the forefront of a new and better way of doing supply chains, and thanks to a richly illustrated book, where every single situation gets its own illustrating code snippet, so could you.

--Joannes Vermorel, CEO, Lokad



Inventory Optimization argues that mathematical inventory models can only take us so far with supply chain management. In order to optimize inventory policies, we have to use probabilistic simulations. The book explains how to implement these models and simulations step-by-step, starting from simple deterministic ones to complex multi-echelon optimization.



The first two parts of the book discuss classical mathematical models, their limitations and assumptions, and a quick but effective introduction to Python is provided. Part 3 contains more advanced models that will allow you to optimize your profits, estimate your lost sales and use advanced demand distributions. It also provides an explanation of how you can optimize a multi-echelon supply chain based on a simple--yet powerful--framework. Part 4 discusses inventory optimization thanks to simulations under custom discrete demand probability functions.



Inventory managers, demand planners and academics interested in gaining cost-effective solutions will benefit from the do-it-yourself examples and Python programs included in each chapter.

Genres: Business

320 pages, ebook

Published May 18, 2020

About the author

Nicolas Vandeput is a supply chain data scientist specialized in demand forecasting and inventory optimization. He founded SupChains in 2016. SupChains builds demand forecasting and inventory planning models for international companies and delivers forecasts as a service.

He wrote Data Science for Supply Chain Forecasting (2018, second edition 2021), Inventory Optimization: Models and Simulations (2020) and Demand Forecasting Best Practices (Manning, 2023). The SupChains Way, the method SupChains applies with its clients, comes from these books.

Nicolas teaches demand forecasting and inventory optimization to master students at CentraleSupélec, Albert School and Mines Paris - PSL. He organized the VN1 forecasting competition in 2024 and the VN2 inventory competition in 2025. He is based in Brussels, Belgium.

Reviews

[Duc Viet]

Well written book. Good flow throughout with intuitions on why each model is built sequentially. Give you a strong foundation on the fundamental building blocks of inventory control. It also introduced a very practical, industry-oriented approach to inventory management, using simulation optimisation. It shows how models and simulation could be built using Python - making it very applicable to the age of technology and programming.

[Steffen Jensen]

Well written book on the major building blocks of inventory optimization. Lots of DIY sections for python, however still very interesting and useful for people (as me) who do not program in python.

[Ferhat Culfaz]

Great book. A niche in the space of applied inventory optimisation using python or excel. Highly recommend.

[Josua Naiborhu]

good read for understanding inventory terms along with mathematical equations laid out in this book for better comprehension.