ECONOMIC EFFECTS OF ARTIFICIAL INTELLIGENCE-DRIVEN DECISION-MAKING MODELS IN SUPPLY CHAINS

Abstract

The integration of Artificial Intelligence (AI) within supply chains has become a key component of improving business operations and economic performance with the advancement of digital technolo-gy. The economic impact on AI-driven decision-making systems are investigated in this paper. Ad-vanced Econometric methods are used, with an ARDL model with an associated ECM, to investigate the short-term and long-term implications of using these technologies. Our results show that the AI implementation in the supply chain industry will result in several advantages including cost savings in logistics operations as well as more accurate business decision making. There will be a substantial up-front capital investment together with current technology risks that will constrain the supply chain businesses in the short run.