ACCA Strategic Professional · Advanced Performance Management · Strategic management accounting
Orlin Manufacturing is deciding how to use predictive analytics on machine sensor data. Which application is an example of predictive rather than descriptive analytics?
Forecasting when a machine is likely to fail is predictive analytics because it uses data to anticipate future events and enable preventive action. Reporting past breakdowns, historic maintenance costs or running hours only describes what already happened, which is descriptive analytics.
- AForecasting when a machine is likely to fail so maintenance can be scheduled beforehandCorrect
- BReporting the number of machine breakdowns last year
- CSummarising total maintenance cost by plant for the past quarter
- DListing the hours each machine ran last month
Explanation
Predictive analytics uses historical and current data to forecast future events, such as failure timing. The other options summarise what has already happened, which is descriptive analytics.
Did you get it right without looking?
One question tells you little. A timed set on Strategic management accounting shows your real accuracy, how long you take and where you lose marks.
More Strategic management accounting questions
- Marlow Telecom wants to sustain advantage by tracking how its costs and margins compare across each activity from design to after-sales serv…
- Zentra plc has net operating profit after tax (NOPAT) of $18.0m. Its capital employed is $120m and its weighted average cost of capital is 9…
- Orlin Components makes two products using activity-based costing. Product X is made in large batches and Product Y in small, complex batches…
- Brindle Retail's directors say that low cost alone no longer protects it, and they ask the management accountant to monitor whether its prod…
- Orchid Pharma's board is concerned that its management accounting information focuses only on short-term profit and cost per unit, so manage…
- Zentra Ltd makes industrial pumps and competes in a market where rivals offer near-identical products. The finance director says that strate…