The science behind Profit Optimized Inventory

An interview with Stefano Alberti, VP Analytics for 4R

Stefano AlbertiSince 2002, Stefano has been a key part of 4R’s success. He brings expertise in forecasting, statistical data analysis, algorithm development and price optimization. He is from Rome, Italy, and lives in San Francisco with his family.


Alberti: 4R’s algorithm is our secret sauce, and I’m the cook of the secret sauce—the math guy. I lead a small team and together we’re continually improving and expanding 4R’s algorithms and mathematical models. We also help the Client Services team tackle the more challenging problems that our clients present to us.

How has 4R Systems technology advanced in the past 5 years?
Alberti: Our math is really our technology. We have been able to leverage the breadth of experience of our growing client base while expanding the depth of our algorithms. Our greater exposure to a wider variety of retail realities have given us opportunities to enrich our solutions in scope and depth, quality, and accuracy.

What are you working on now, and how will it help retailers?
Alberti: I’m working on the next generation of reorder point. Almost everything we do surrounds the reorder point, which lies at the heart of 4R’s inventory recommendations. Our next generation reorder point allows more features to be built in such as shelf-space constraints, obsolescence for perishable products, and more.

How do you define success for a 4R Systems customer?
Alberti: There is a quantitative and qualitative measure of success. The quantitative is unequivocal. Measuring the impact of our inventory recommendation on the bottom line: increased margins. That’s measurable. The qualitative measure is the happiness of the client with our team. Objectively, every client can point to how we’ve helped improve their margins.

Advice for retailers implementing 4R Systems solution?
Alberti: Distill the complexity of their own system into what really matters. See how profit optimized inventory can help improve their profits. Further, let go of other measurements of success that don’t directly tie to profit. Other metrics don’t matter as much as profit. Profit should be king.