Impact of Artificial Intelligence on Forecasting and Inventory Management

The integration of Artificial Intelligence (AI) in supply chain functions has revolutionized traditional business operations. This paper explores the transformative impact of AI technologies on forecasting accuracy and inventory management efficiency, focusing on how AI-driven tools optimize stock levels, reduce operational costs, and improve demand prediction. Using a mixed-methods approach—comprising literature review, case study insights, and statistical analysis—the study finds that AI significantly enhances forecasting precision, supports real-time inventory visibility, and facilitates proactive replenishment strategies. As global markets face growing volatility and uncertainty, AI emerges as a critical enabler of agile and resilient inventory systems. This paper also identifies implementation barriers and provides recommendations for effective AI adoption in inventory operations.