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ACCA Strategic Professional · Advanced Performance Management · Technology and information systems

Delmar Logistics is introducing a dashboard that uses machine-learning models on telematics data to estimate which delivery vehicles are likely to break down within 30 days, so that maintenance is scheduled in advance and bonuses for depot managers are based partly on avoided downtime. Which is the most significant risk to the reliability of the performance measure used for the bonus?

The main risk is that models trained on poor or biased historical data give inaccurate predictions. Since the bonus relies on avoided downtime, unreliable outputs would distort the measure and reward managers unfairly. Data quality and model validity matter more than presentation style or feedback frequency.

  1. AThe dashboard displays data graphically rather than in tables
  2. BModels trained on poor or biased historical data may give inaccurate predictions, distorting the measure and rewardsCorrect
  3. CTelematics data is produced too quickly to be stored
  4. DDepot managers will receive feedback too frequently

Explanation

Predictive outputs depend on the quality and representativeness of the training data. Inaccurate or biased predictions would make the avoided-downtime measure unreliable and could reward or penalise managers unfairly. Graphical display, speed of data and frequent feedback are not primary threats to measure validity.

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