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ACCA Strategic Professional · Strategic Business Leader · Machine learning, AI and robotics

Corvane Retail uses an AI system to forecast demand per store and automatically adjust stock orders. The board says the main strategic benefit is a sustainable edge over rivals rather than lower processing cost. Which feature of the application best supports that claim?

The best support is that the system learns from proprietary sales data rivals cannot easily copy, so its forecasts keep improving. This is a hard-to-imitate capability, whereas payroll savings, cloud hosting and faster reports are efficiency gains competitors can easily match.

  1. AIts learning from proprietary sales data that competitors cannot easily replicate, improving forecast accuracy over timeCorrect
  2. BIts replacement of two clerical staff, reducing payroll costs
  3. CIts use of cloud hosting, which removes the need for in-house servers
  4. DIts ability to produce reports faster than manual spreadsheets

Explanation

Competitive advantage arises from resources that are valuable and hard to imitate. A model trained on proprietary data that improves with use fits this. Cost saving, hosting and speed are efficiency gains that rivals can copy easily.

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