diff --git a/ai_modules/anomaly_detection.py b/ai_modules/anomaly_detection.py
new file mode 100644
index 0000000..4b11a6a
--- /dev/null
+++ b/ai_modules/anomaly_detection.py
@@ -0,0 +1,22 @@
+import pandas as pd
+
+def detect_anomalies(data: pd.Series, z_thresh: float = 3.0):
+    """
+    Simple anomaly detection using Z-score.
+    Args:
+        data (pd.Series): Series of water usage values
+        z_thresh (float): threshold for anomaly detection
+    Returns:
+        pd.Series: points detected as anomalies
+    """
+    mean = data.mean()
+    std = data.std()
+    z_scores = (data - mean) / std
+    return data[abs(z_scores) > z_thresh]
+
+if __name__ == "__main__":
+    # Example usage with dummy data
+    readings = pd.Series([100, 105, 98, 500, 102, 97, 103])
+    anomalies = detect_anomalies(readings, z_thresh=2.0)
+
+    print("Anomalies detected:\n", anomalies)
diff --git a/requirements.txt b/requirements.txt
new file mode 100644
index 0000000..cb37f8c
--- /dev/null
+++ b/requirements.txt
@@ -0,0 +1,6 @@
+numpy==2.3.2
+pandas==2.3.2
+python-dateutil==2.9.0.post0
+pytz==2025.2
+six==1.17.0
+tzdata==2025.2