Skip to content

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

Aarav Traders uses analytics software that not only forecasts a likely stock shortage in the next quarter but also recommends the exact reorder quantity and timing to minimise cost. A manager says this is predictive analytics. A company secretary reviewing the tool should conclude that:

The tool is prescriptive analytics. Although it forecasts a shortage, which is predictive, it also recommends the optimal reorder quantity and timing to minimise cost. Recommending the best action is what distinguishes prescriptive from predictive analytics.

  1. AThe manager is right, because any use of forecasts is predictive analytics
  2. BThe tool is descriptive, because it relies on past stock records
  3. CThe tool is diagnostic, because it addresses a stock problem
  4. DThe tool goes beyond predictive and is prescriptive analytics, as it recommends optimal actionsCorrect

Explanation

Forecasting the shortage is predictive, but recommending the best reorder quantity and timing to optimise an outcome is the defining feature of prescriptive analytics. Hence the manager's label is incomplete. Using past records does not make a tool descriptive.

Did you get it right without looking?

One question tells you little. A timed set on Data Analytics shows your real accuracy, how long you take and where you lose marks.

Practise Data AnalyticsFree diagnostic mock

More Data Analytics questions