ISACA Certified Artificial Intelligence Auditor (CAIA) — Question 12

A retail organization uses an AI model to forecast inventory based on customer purchasing trends and updates the model quarterly. The model recently failed to recognize a surge in demand during a popular shopping season. Which of the following issues does this situation BEST demonstrate?

Answer options

• A. Data drift impacting system forecasting
• B. Overfitting issues due to a small training data set
• C. Lack of outlier checks in data affecting forecast accuracy
• D. Limited data set diversity impacting model training

Correct answer: A

Explanation

The correct answer is A because the model's failure to recognize a demand surge indicates that it has not adapted to recent changes in customer behavior, which is a hallmark of data drift. Options B, C, and D are not applicable in this scenario as they pertain to different issues such as training data size, outlier management, and data diversity, none of which directly explain the model's inability to forecast the sudden increase in demand.