Supply chain management can benefit from using commodity forecasts because they can assist reduce procurement risks and enhance hedging choices. Forecasts of future prices and supplies of commodities—such as raw materials or energy sources—used in the manufacture of goods and services are known as commodity forecasts.
Supply chain operations can be enhanced by the use of artificial intelligence (AI), which can produce more precise and timely commodity forecasts. AI algorithms, for instance, can examine a variety of data sources, such as historical pricing, weather patterns, geopolitical events, and economic indicators, to find trends and patterns that could impact the price and supply of commodities in the future.
Companies may make more educated decisions about when, how much, and at what price to buy by employing AI-generated commodity forecasts. This can assist in lowering procurement risks like supply disruptions or unexpected price increases and guarantee that the business has a steady supply of the essential goods.
Also, companies are able to make smarter hedging decisions with the aid of AI-generated commodities projections. By establishing a stake in a comparable market, hedging is a financial tactic used to reduce risk. For instance, a business that consumes a lot of oil can buy futures contracts to fix the cost of upcoming supply. Companies can estimate future commodity prices more accurately by employing AI-generated commodity forecasts, which can guide their hedging strategies and possibly result in long-term financial savings.
Overall, AI-generated commodity forecasts are a useful tool for supply chain management that can lower procurement risks and enhance hedging choices for companies.
Find out more on “Commodity Forecasts” on 30th May - 1st June, 2023 at the Supply Chain Risk and Resilience Forum, in Berlin, Germany so you don't feel left out in the industry!
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