ACCA Strategic Professional · Advanced Performance Management · Management reports

Delmar Pharma's data science team builds a model that, from sales forecasts, production capacity and supplier lead times, recommends the production schedule that maximises contribution, and automatically updates the recommendation as new data arrives. A board member says this is merely a more detailed version of the monthly variance report. Which response is MOST accurate?

The model is prescriptive analytics, so the board member is wrong. It combines forecasts and constraints to recommend the contribution-maximising production schedule and updates it as new data arrives, whereas a variance report only describes or explains past results.

1. AAgreed, because both rely on historical data and describe past performance
2. BDisagree, because the model is prescriptive, recommending actions rather than only describing or explaining past resultsCorrect
3. CAgree, because variance reports are also prescriptive when they show favourable variances
4. DDisagree, because the model is diagnostic, identifying why past production costs differed from budget