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CSEET · Economic and Business Environment · AI and Business Environment

A retail company in Pune uses an AI tool to forecast demand for each store and adjust stock orders automatically. Which benefit of AI in business is most directly illustrated?

The example shows improved forecasting and operational efficiency. AI analyses past sales data to predict demand and adjust stock orders, reducing wastage and stock-outs. It does not eliminate market risk, remove the need for data, or ensure legal compliance without human review.

  1. AImproved forecasting and operational efficiency through data-driven decisionsCorrect
  2. BElimination of the need for any business data
  3. CGuaranteed removal of all market risks
  4. DAutomatic compliance with every law without review

Explanation

Demand forecasting uses historical data patterns to predict sales and optimise inventory, which improves efficiency and reduces stock-outs or overstocking. AI cannot remove market risk or the need for data, and legal compliance still needs human oversight.

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