Optimization Algorithm for Inventory Management on Classical, Quantum and Quantum-Hybrid Hardware

Abstract: Among the challenges of efficiently managing a factory, inventory management is essential for minimizing operational costs and delivery times. In this paper, we focus on optimizing item allocation in warehouses that use gravity flow racks, which are designed for First In, First Out (FIFO) logistics but present challenges due to the need for frequent item reinsertions during picking operations. We introduce a novel strategy formulated as a QUBO problem, suitable for classical, quantum, and hybrid hardware implementations. By leveraging advances in Adiabatic Quantum Computing and Quantum Annealing, we demonstrate the effectiveness of our strategy through simulations and real-world scenarios. The results highlight the potential of quantum-hybrid approaches to significantly enhance operational efficiency in warehouse management.