Abstract: The present invention discloses a system and a method for optimizing Unmanned Aerial Vehicle (UAV) based warehouse management, where an optimized path for UAV is generated in real time based on the density of inventory. In operation, the present invention provides for identifying landmark features of the warehouse and density of inventory. Further, a 3D grid map an aisle of the warehouse is generated using the density of inventory. Finally, a navigation path for the UAV for a mission is generated based on the generated 3D grid map using one or more path planning techniques. Further, the present invention provides for updating the navigation path if one or more changes are observed in the density of the inventory.