DeepStock: Reinforcement Learning with Policy Regularizations for Inventory Management

Deep Reinforcement Learning (DRL) provides a general-purpose methodology for training inventory policies that can leverage big data and compute. However, off-the-shelf implementations of DRL have seen mixed success, often plagued by high sensitivity to the hyperparameters used during training. In this paper, we show that by imposing policy regularizations grounded in classical inventory concepts such as “Base Stock,” we can significantly accelerate hyperparameter tuning and improve the final performance of several DRL methods. We report details from a 100% deployment of DRL with policy regularizations on Alibaba’s e-commerce platform, Tmall. We also include extensive synthetic experiments showing that policy regularizations reshape the narrative on the best DRL method for inventory management.

History: This paper has been accepted for the INFORMS Journal on Applied Analytics Special Issue—2025 Daniel H. Wagner Prize for Excellence in the Practice of Advanced Analytics and Operations Research.