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

A hotel group wants to predict room demand using data from booking systems, weather forecasts and online reviews. Which of the following is a recognised limitation or risk of relying on big data for such analysis?

Poor-quality or biased data can produce misleading conclusions even if the dataset is very large. This is the veracity issue: size does not guarantee accuracy. Analytics can handle unstructured data and can identify customer patterns, so the other statements are incorrect.

  1. AData analytics can only be applied to structured financial data
  2. BLarge datasets guarantee that the conclusions are accurate
  3. CPoor-quality or biased data can lead to misleading conclusions even when the dataset is very largeCorrect
  4. DBig data cannot be used to identify patterns in customer behaviour

Explanation

Veracity is one of the five Vs, and size does not remove errors or bias; poor data produces unreliable analysis. Analytics can use unstructured data and can identify customer behaviour patterns, and no volume of data guarantees accuracy.

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