Impact of AI Forecasting Accuracy and AI Inventory Optimization on Supply Chain Performance: Mediating Role of Decision-Making Efficiency and Moderating Role of Environmental Uncertainty

Authors

  • Einas Azhar
  • Saqib Munawwar
  • Ejaz Ur Rahman
  • Aisha Ghuffran
  • Abdul Rahman Khan

Abstract

Artificial intelligence (AI) is transforming supply chain management by improving forecasting accuracy and optimizing inventory decisions. This study examines how AI forecasting accuracy and AI inventory optimization influence supply chain performance. It also investigates the mediating role of decision-making efficiency and the moderating role of environmental uncertainty. The main aim is to understand not only the direct impact of AI capabilities but also how they improve performance through better managerial decisions and how uncertain environments affect this relationship. A quantitative research approach was used, and data were collected from 384 supply chain professionals using a structured questionnaire based on a five-point Likert scale. The data were analyzed using SmartPLS (PLS-SEM) to test the relationships between variables, including direct, indirect, and moderating effects. The results show that both AI forecasting accuracy and AI inventory optimization have a positive and significant impact on supply chain performance. In addition, both variables significantly improve decision-making efficiency, which further enhances performance. The study also finds that decision-making efficiency plays a mediating role, meaning that AI technologies improve supply chain performance mainly through better and faster decisions. Furthermore, environmental uncertainty moderates the relationship between decision-making efficiency and performance, indicating that the effect of decision-making becomes more important in uncertain and dynamic environments. This study provides useful insights for managers by showing that adopting AI technologies alone is not enough. Organizations must focus on improving decision-making processes and building flexible systems to handle uncertainty. By doing so, firms can enhance efficiency, reduce costs, and improve overall supply chain performance.

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Published

2026-02-18

How to Cite

Einas Azhar, Saqib Munawwar, Ejaz Ur Rahman, Aisha Ghuffran, & Abdul Rahman Khan. (2026). Impact of AI Forecasting Accuracy and AI Inventory Optimization on Supply Chain Performance: Mediating Role of Decision-Making Efficiency and Moderating Role of Environmental Uncertainty. Policy Journal of Social Science Review, 4(2), 776–798. Retrieved from https://www.policyjssr.com/index.php/PJSSR/article/view/918