Amazon lets algorithms decide purchasing and inventory management

Web store Amazon has recently transferred more and more tasks from employees who decide on the price and quantity of products to be purchased and inventory management to algorithms. These often turned out to be correct in the prediction of the purchasing behavior of customers.

Amazon’s algorithms determine in advance approximately how many customers will buy a particular book or piece of electronics and then automatically propose deals to suppliers, Bloomberg reports. The initiative started under the name ‘hands off the wheel’, where sales managers could easily undo the decisions of the algorithm.

This was followed by a phase in which employees had to substantiate such a decision and the entire process has now been automated. The people, often with a salary of a million dollars or more, have now left, the financial news agency claims. Also entering into partnerships with brands about so-called ‘Lightning Deals’, quick offers with limited stock, has been done via an algorithm for the past two years.

In addition to relationships with brands and suppliers, the algorithms now also manage inventory and keep track of how much of which product Amazon has. According to employees, this works more accurately and faster.

Several Amazon employees confirm the information to Bloomberg. The web store itself does not deny it and says it has been working for years to ‘standardize tools for brands’ that are in the webshop. The company emphasizes that it has 16,000 vacancies for people worldwide.