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

Zenara Retail's finance team currently reviews monthly sales reports that explain why last month's sales fell below budget in each region. The CFO now wants a model that uses historical sales, weather and promotion data to estimate next quarter's sales by region. Which type of analytics is the CFO requesting?

The CFO is requesting predictive analytics, because the model uses historical and external data to estimate future sales. Diagnostic analytics explains past variances, descriptive summarises past results, and prescriptive recommends actions. A forecast of next quarter's regional sales is a predictive task.

  1. ADescriptive analytics
  2. BDiagnostic analytics
  3. CPredictive analyticsCorrect
  4. DPrescriptive analytics

Explanation

Using historical and external data to estimate future outcomes is predictive analytics. Explaining why past sales fell short is diagnostic. Descriptive analytics only summarises what happened, and prescriptive analytics would recommend the actions to take. The CFO has asked for a forecast, not a recommendation.

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