ACCA Applied Knowledge · Business and Technology · The impact of advances in technology
A retailer analyses its past sales records to explain why sales of winter clothing fell by 15% last year, looking at weather, pricing and promotions. Which type of data analytics is the retailer using?
The retailer is using diagnostic analytics, because it examines historical data to find out why sales fell. Descriptive analytics merely summarises what happened, while prescriptive analytics recommends future actions, so neither fits an analysis of causes.
- ADescriptive analytics
- BDiagnostic analyticsCorrect
- CPrescriptive analytics
Explanation
Diagnostic analytics investigates why something happened by examining causes and relationships in historical data. Descriptive analytics would only report that sales fell. Prescriptive analytics would recommend what action to take next.
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