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ACCA Strategic Professional · Advanced Performance Management · Data science and analytics

Halden Foods is deciding how to invest in analytics. The finance director says: 'Each type of analytics adds more value but also needs more data maturity and is harder to implement.' Which ordering of analytics types, from least to most complex and valuable, is consistent with this view?

The correct progression is descriptive, diagnostic, predictive, prescriptive. Descriptive reports what happened, diagnostic explains why, predictive forecasts what is likely to happen, and prescriptive recommends what to do. Each stage builds on the previous one and demands greater data quality, skills and technology.

  1. ADescriptive, predictive, diagnostic, prescriptive
  2. BDiagnostic, descriptive, predictive, prescriptive
  3. CDescriptive, diagnostic, predictive, prescriptiveCorrect
  4. DDescriptive, diagnostic, prescriptive, predictive

Explanation

The standard maturity progression asks what happened (descriptive), why (diagnostic), what will happen (predictive) and what should be done (prescriptive). Options A and D place predictive and prescriptive in the wrong order, as prescriptive builds on predictions. Option B puts diagnostic before descriptive, although explaining needs a description first.

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