Final answer:
Improving forecast accuracy using better market intelligence can have a significant impact on supply chain inventories and profitability for a firm, thus enabling a company to stay competitive and meet market demands.
Step-by-step explanation:
Market intelligence is gathering data in real time from the market and further understanding the customers, trends, behaviors, etc. Better market intelligence allows the firm to have a more accurate understanding of customer demand patterns, which helps them optimize their inventory levels.
With improved forecast accuracy, the firm can avoid excessive inventory levels, reducing holding costs and the risk of obsolescence. On the other hand, it also helps prevent stockouts, ensuring timely availability of products to meet customer demand.
In terms of profitability, better forecast accuracy helps minimize lost sales due to stockouts, leading to increased revenues. It also helps streamline production and logistics processes, reducing costs associated with excess inventory and expedited shipments.