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

Orion Logistics uses a model trained on three years of delivery data, weather and traffic records to estimate the probability that each shipment will arrive late next week. Management has not yet decided what to do with the output. Which statement best describes this activity?

This is predictive analytics. The model learns patterns from historical delivery, weather and traffic data to estimate the probability that future shipments will be late. It does not yet recommend what action to take, so it is not prescriptive, and it looks forward rather than explaining or summarising the past.

  1. APredictive analytics, because it estimates the likelihood of future outcomes from historical patternsCorrect
  2. BPrescriptive analytics, because it uses a model and large data volumes
  3. CDiagnostic analytics, because historical records are used as inputs
  4. DDescriptive analytics, because delivery data is being summarised

Explanation

The model forecasts the probability of late arrival, which is a future outcome, using patterns in historical data. That is predictive analytics. It is not prescriptive because no recommended action or optimised decision is generated. Using historical data as input does not make it diagnostic.

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