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CS Professional · Artificial Intelligence, Data Analytics and Cyber Security - Laws and Practice · Data Analytics

A logistics company's system analyses forecast demand, fuel costs and traffic data, and then recommends the specific delivery routes and fleet allocation that minimise cost. Which statement is correct?

It is prescriptive analytics. Although demand forecasting is predictive, the system goes further by recommending the optimal routes and fleet allocation to minimise cost. Recommending the best action is the hallmark of prescriptive analytics, which builds on descriptive and predictive stages.

  1. AIt is descriptive analytics because it uses traffic data
  2. BIt is predictive analytics because demand is forecast, and no further type is involved
  3. CIt is prescriptive analytics because it recommends the best course of actionCorrect
  4. DIt is diagnostic analytics because it considers costs

Explanation

Forecasting demand is predictive, but recommending the optimal routes and allocation is the defining feature of prescriptive analytics. Option B is wrong because it stops at the forecast and ignores the recommendation step, which is the final output here.

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