AI and Cost Management: Strategies for Reducing Expenses and Improving Profit Margins in Business

In an era where business efficiency and financial optimization are paramount, Artificial Intelligence (AI) emerges as a transformative force in cost management strategies. This survey paper explores the multifaceted role of AI technologies in enhancing business operations, with a focus on reducing expenses and improving profit margins. Through a systematic review of current literature and an examination of various AI applications-ranging from Machine Learning (ML), Natural Language Processing (NLP), to Robotics Process Automation (RPA)-we delve into the mechanisms through which AI facilitates predictive analytics, operational efficiency, and decision-making processes. We present a comprehensive analysis of mathematical models and algorithms that underpin AI’s cost management capabilities, including regression analysis, time series forecasting, and optimization algorithms for resource allocation. Comparative results highlight the effectiveness of these technologies in real-world scenarios, underscored by graphical analyses of cost savings and return on investment (ROI). Despite the promising advancements, we discuss the challenges faced by businesses, such as ethical considerations and potential job displacement. The paper concludes with future directions for AI in cost management, offering insights and recommendations for businesses aiming to leverage AI for financial optimization. This study not only bridges the gap in literature but also serves as a guide for integrating AI into cost management strategies.