ACCA Applied Knowledge · Business and Technology · The impact of advances in technology
A retailer analyses past sales records to find out why sales of winter coats fell by 20% last year, looking at weather, pricing and competitor promotions. Which type of data analytics is this?
This is diagnostic analytics because it investigates historical data to explain why an event occurred, here the fall in coat sales. Descriptive analytics would just state the fall, predictive would forecast future sales, and prescriptive would recommend what to do.
- APredictive analytics
- BDiagnostic analyticsCorrect
- CPrescriptive analytics
- DDescriptive analytics
Explanation
Diagnostic analytics examines historical data to explain why something happened. Descriptive analytics only reports what happened, predictive forecasts what will happen, and prescriptive recommends actions. Here the focus is on the reasons for the fall in sales.
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