Workshop’s Topic: While extensive literature highlights the benefits of artificial intelligence (AI), recent research suggests its side effects. The overall influence of AI application may vary across empirical contexts and the AI adoption intensity (the extent to which firms use AI in their specific business processes). This paper analyzes the impact of suppliers’ AI adoption in retailers’ procurement processes on product availability. Theoretically, adopting AI in the procurement process generates two conflicting effects on product availability: the efficiency enhancement that increases product availability and the expertise exclusion that decreases product availability. The overall impact of AI adoption depends on the tradeoff between them. Moreover, the tradeoff between these opposing efects may change over the AI adoption intensity, thus potentially leading to a nonlinear impact on product availability. We collected proprietary data from a leading online retailer to investigate how the supplier’s AI adoption intensity affects the retailer’s product availability. The empirical results suggest significant and positive overall impact of AI adoption intensity. Our nonlinear analyses show that this impact follows an inverted U-shaped pattern when AI adoption intensity increases. This nonlinear impact suggests that more AI adoption does not necessarily result in better product availability. Too much AI adoption in procurement adversely hurts product availability, Furthermore, to disentangle these two conflicting effects, we investigate how product variety moderates the impact of AI adoption intensity since increased product variety is expected to magnify the expertise exclusion effect. Our results imply the importance of tailored AI adoption strategies for suppliers considering their product variety. Specifically, firms should develop their workforce with domain expertise to handle extensive product varieties. Our study thus provides theoretical contributions and practical implications for AI adoption in managerial decision-making tasks.

Time and Location: 10:00 AM (GMT+8), Room A523 (School of Management)

Language: Bilingual (Chinese and English)