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Digital Flow Diagram

Forecasts & Scenarios

AI is useful for demand forecasting because...

of its ability to quickly interpret vast amounts of data. Using a process known as machine learning, generative AI such as ChatGPT can make future predictions based on the analyzed data. AI allows this interpretation to be more real-time and also incorporates new sources of information that the business may not have. One source of information is the AI’s own experience with similar project management questions asked by users. Over time, it is able to develop a more accurate response.

The use of newer generative AI allows easier use of preexisting machine learning models by allowing a wider range of inputs and outputs. This is easier to understand with an example of the opposite: weather forecasting. While there has been some recent addition of AI, weather forecasting traditionally uses models based on mathematics. Certain atmospheric conditions are likely to produce certain weather conditions. The input the computer needs to calculate is not a format that is easily understandable and analyzable to humans. AI instead uses natural language queries, so in that case one could ask "Look at the past (1 week) and current weather conditions for White River Junction, VT. What will happen next week?". The same can be applied to business analysis. For example, one can forecast future outcome metrics like estimated completion time. AI can use data from the project and other projects to predict whether the estimated completion time is still reasonable and offer suggestions to remediate the issue if not.

AI can help with predicting future demand by analyzing supply-chain relationships. Specifically, it can allow producers to maintain more stable inventory levels in response to fluctuating demand. By incorporating data from multiple industry sources, it can allow business leaders to make better stocking decisions. In addition, it has the potential to autonomously make these decisions. For example, a grocery store may stock additional amounts of candy before Halloween. AI could help determine roughly how much candy to stock based on other stores, overall trick-or-treating trends, and economic trends. It could also determine which new candies to stock based on Internet novelty and overall sales trends.

  One way AI can help in scenario modeling is in expansion planning. For example, a business may be looking to introduce a new product. AI can help look at existing competition and the intended market audience to determine the viability of the product as well as specific recommendations to improve it. 

Analyzing Business Data
Analyzing Stock Trends

Material & Research Gathered by:

Jacob Grover

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