The Impact of AI-Driven Demand Forecasting on Inventory Management in Bangladesh’s FMCG Sector: Exploring the Challenges, Benefits, and Future of Implementing AI for Optimized Inventory Control

Abstract

The adoption of Artificial Intelligence (AI) in the Fast-Moving Consumer Goods (FMCG) industry is gaining popularity in Bangladesh as the country pursues the goal of modernizing its supply chains and overcoming inefficiencies in inventory management. The paper examines how AI-based demand forecasting can influence inventory management within the FMCG industry in Bangladesh, in terms of how it could help mitigate two critical problems in this industry, namely stockouts and overstocking. The research presents a description of the present situation of the FMCG supply chain in Bangladesh and the inefficiency of the inventory management, i.e., the over-reliance on the traditional methods of forecasting that frequently result in excessive inventory or lost sales. The paper evaluates the preparedness of FMCG sector in Bangladesh to implement AI based on the availability of digital infrastructure, technical skills and the regulatory environment. Even the evident benefits of AI, financial constraints, the absence of qualified specialists, and aversion to change are named as the significant challenges to its widespread use. Using a mixture of secondary and primary data analysis, conducted on a survey of supply chain professionals in Bangladesh, this paper outlines the primary barriers and suggests practical solutions to implementing AI in the FMCG supply chain. The results indicate that AI-based demand forecasting may bring the company impressive outcomes in inventory optimization, enhanced operational efficiency, and achieving cost reduction. This makes AI an important resource of enhancing supply chain in the FMCG sector of Bangladesh, Contributing to economic growth and improved service delivery to the retail market.