Arizona State University's Brett Duarte on AI supply chain strategy, part 2: demand forecasting, inventory optimization, and safety stock Get your forecast wrong in one direction and you've got empty shelves. Get it wrong the other way and you've got a warehouse full of product nobody wants. Professor Brett Duarte pointed to Amazon reporting a 35% reduction in stockouts from its AI inventory tools. So which parts of the AI promise hold up in supply chain operations? Season 2, Episode 14 of Data Blades continues our 3-part mini-series with Professor Brett Duarte of Arizona State University's W. P. Carey School of Business. The series follows ASU's AI-Enabled Supply Chain Strategy executive program running October 5 to 7 on the Tempe campus. Part 1 covered procurement. Part 2 moves downstream into operations, where a forecast turns into inventory and inventory turns into either a sale or a markdown. Brett walks through the AI demand forecasting toolkit layer by layer: extrapolation from historical data, regression and econometric models, machine learning for nonlinear patterns, and large language models acting as a reasoning layer on top. That top layer handles what he calls narrative synthesis and multi-source fusion, pulling qualitative signals like a Wall Street Journal article on consumer sentiment, the consumer price index, or inflation data into the forecast. Casey admits capacity planning in ERP often felt like "pretend functionality." Ricardo describes the retail version of real time: however fast someone can update the spreadsheet. Then Brett turns to inventory optimization, where AI moves teams off static reorder points and monthly forecasts. He describes an agent that senses a demand spike, raises a purchase order, checks the supplier contract for budget limits and terms, sends routine orders automatically, and routes important ones to a human. He closes on multi-echelon inventory optimization and why the location of your safety stock matters as much as the amount.What you'll learn in this episode.Why AI demand forecasting and inventory optimization are two halves of one decision [00:03:43]How AI demand forecasting stacks extrapolation, regression, machine learning, and LLMs [00:06:14]What narrative synthesis and multi-source fusion mean for a forecast that can read the news [00:07:07]Why forecasting is moving from Python code into the hands of managers and executives [00:08:31]How AI agents replace the days of manual spreadsheet updates behind a forecast [00:09:43]How AI agents adjust safety stock and raise purchase orders, and when a human steps in [00:12:14]What multi-echelon inventory optimization is and why it's a strategic decision [00:13:10] Next Episode.Part 3 finishes the map with logistics: routing, network design, control towers, last mile, and what AI can do when a shipment goes sideways. Then we widen the lens to the question every executive eventually asks their supply chain team: what's the infrastructure, the governance, and the ROI case before anything gets funded? And we'll bring procurement, operations, and logistics together as one strategy. Follow Data Blades so you don't miss it. Support Our Sponsors.There’s still time to join us at RetailClub AI Festival.From the founders of Shoptalk and Groceryshop, RetailClub AI Festival brings together 2,000 industry leaders from September 22 to 24 for three days fully outdoors in Huntington Beach focused entirely on how AI is transforming retail. Hear from 150 leaders shaping how AI is being used across the industry, explore the technologies changing how retail works, and connect with senior leaders from across retail, brands, technology and investment. Late registration is now available at retailclub.com/retail-razor-podcast. We’ll see you in Huntington Beach! W. P. Carey School of Business, Arizona State University.ASU is a leading public research university and its W. P. Carey School of Business is the largest in the United States. AI-Enabled Supply Chain Strategy is a 3-day executive program running October 5-7, built by the #2-ranked Supply Chain Management department. The program is designed for senior leaders setting AI strategy across procurement, logistics, and operations.Register at https://specialevents.asu.edu/878064 with ID Code retailrazorasu for $1,500 off.Subscribe & Follow.Love this episode? Drop us a five-star rating and review on Apple Podcasts, Spotify, or Goodpods. Don't forget to like and subscribe to The Retail Razor: Data Blades for more episodes on customer experience, retail marketing, AI in retail, and data‑driven transformation!Subscribe to the Retail Razor Podcast Network: https://retailrazor.com/Subscribe to our Newsletter: https://retailrazor.substack.comSubscribe to our YouTube channel: https://go.retailrazor.com/utubeAbout Our Guest.Brett Duarte, Ph.D. https://www.linkedin.com/in/brettduarte/Arizona State University | W. P. Carey School of BusinessNASPO Department of Supply Chain ManagementClinical Associate ProfessorSenior Faculty Co-Director – MSBAwpcarey.asu.edu | research.wpcarey.asu.eduBrett Duarte is a Clinical Associate Professor in the NASPO Department of Supply Chain Management at Arizona State University's W. P. Carey School of Business, the largest business school in the United States with more than 25,000 students. He is senior faculty co-director of the school's Master of Science in Business Analytics program and assistant chair for graduate programs in supply chain. ASU's supply chain management program is ranked #2 in the country by U.S. News and World Report. Brett is on the faculty teaching the AI-Enabled Supply Chain Strategy Executive Program this October.Chapters(00:00) Teaser (00:27) Show Intro(03:25) Welcome Back Professor Brett Duarte(05:03) Why Forecasting Matters(06:14) Modern AI Forecasting Toolkit(09:43) Real Time Agents In Practice(10:29) Inventory Management Focus(12:14) Dynamic Replenishment Workflows(13:10) Strategic Multi Echelon Optimization(14:11) Wrap Up And Next Episode(15:28) Show CloseAbout your HostsHelping you cut through the clutter in retail data insights:Ricardo Belmar is an NRF Top Retail Voice for 2025 and a RETHINK Retail Top Retail Expert from 2021 – 2026. Thinkers 360 has named him a Top 10 Thought Leader in Retail and eCommerce, a Top 25 Thought Leader in Careers, a Top 50 Thought Leader in Agentic AI, AGI and Management, and a Top 100 Thought Leader in AI Ethics, Marketing, Digital Transformation andTransformation. Thinkers 360 also named him a Top Digital Voice for 2024 and 2025. He is an advisory council member at George Mason University’s Center for Retail Transformation and the Retail Cloud Alliance. He was most recently the partner marketing leader for retail & consumer goods in the Americas at Microsoft.Casey Golden, is the North America Leader for Retail & Consumer Goods at CI&T, and CEO of Luxlock. She is a RETHINK Retail Top Retail Expert from 2023 - 2026, and Retail Cloud Alliance advisory council member. After a career on the fashion and supply chain technology side of the business, Casey is obsessed with the customer relationship between the brand and the consumer and is slaying franken-stacks and building retail tech! MusicIncludes music provided by imunobeats.com, featuring Tech Lore from the album Beat Hype, written by Heston Mimms, published by Imuno.