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ACCA Applied Skills · Performance Management · Big data and data analytics

A company uses data from sensors on its delivery vehicles to feed a model that recommends the delivery routes which minimise fuel cost for tomorrow's orders. Which type of analytics is this?

This is prescriptive analytics because the model recommends the action to take, choosing routes that minimise fuel cost. Predictive analytics would only forecast what is likely to happen, while descriptive and diagnostic analytics explain what or why events occurred in the past.

  1. APrescriptive analyticsCorrect
  2. BDescriptive analytics
  3. CDiagnostic analytics
  4. DPredictive analytics, because it looks at tomorrow

Explanation

The model recommends the best course of action, which is the defining feature of prescriptive analytics. Predictive analytics would only forecast likely outcomes, such as expected fuel use, without recommending a route. Descriptive and diagnostic analytics look at past events only.

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