AI Agents for Inventory Control: Human-LLM-OR Complementarity

TL;DR

This paper explores how operations research algorithms, large language models, and humans can effectively collaborate in inventory control, demonstrating that combined approaches outperform individual methods on a comprehensive benchmark.

Contribution

It introduces InventoryBench, a new benchmark for testing inventory decisions, and shows that hybrid methods and human-AI teams outperform standalone approaches.

Findings

OR-augmented LLMs outperform individual methods.

Human-AI teams achieve higher profits than humans or AI alone.

A substantial fraction of individuals benefit from AI collaboration.

Abstract

Inventory control is a fundamental operations problem in which ordering decisions are traditionally guided by theoretically grounded operations research (OR) algorithms. However, such algorithms often rely on rigid modeling assumptions and can perform poorly when demand distributions shift or relevant contextual information is unavailable. Recent advances in large language models (LLMs) have generated interest in AI agents that can reason flexibly and incorporate rich contextual signals, but it remains unclear how best to incorporate LLM-based methods into traditional decision-making pipelines. We study how OR algorithms, LLMs, and humans can interact and complement each other in a multi-period inventory control setting. We construct InventoryBench, a benchmark of over 1,000 inventory instances spanning both synthetic and real-world demand data, designed to stress-test decision rules under demand shifts, seasonality, and uncertain lead times. Through this benchmark, we find that OR-augmented LLM methods outperform either method in isolation, suggesting that these methods are complementary rather than substitutes. We further investigate the role of humans through a controlled classroom experiment that embeds LLM recommendations into a human-in-the-loop decision pipeline. Contrary to prior findings that human-AI collaboration can degrade performance, we show that, on average, human-AI teams achieve higher profits than either humans or AI agents operating alone. Beyond this population-level finding, we formalize an individual-level complementarity effect and derive a distribution-free lower bound on the fraction of individuals who benefit from AI collaboration; empirically, we find this fraction to be substantial.