Abstract

This paper presents a conceptual framework for achieving inventory optimization while balancing profitability and sustainability in the retail sector. In an era where resource efficiency and environmental responsibility are critical, the study highlights the role of data-driven approaches, including predictive analytics, sustainability metrics, and advanced technologies such as AI and IoT. By analyzing the environmental consequences of overstocking and understocking, the paper emphasizes the need for circular inventory systems and resource-efficient procurement practices to minimize waste and align with global sustainability goals. Additionally, the framework provides a theoretical model for integrating profitability objectives, such as cost savings and supply chain efficiency, with sustainability imperatives, like carbon footprint reduction and lifecycle management. The findings underscore that retailers of all scales can leverage data analytics and technology to achieve optimized inventory practices that contribute to both business growth and environmental sustainability. This paper guides retailers seeking innovative, sustainable solutions to inventory challenges in an increasingly complex and competitive market.