Certified Specialist Business Intelligence Practice Test

What is one characteristic that distinguishes prescriptive analytics from other types?

1. Focuses on past data

2. Predicts future trends

3. Recommends actions based on potential outcomes

4. Analyzes user satisfaction scores

The correct answer is: Recommends actions based on potential outcomes

Prescriptive analytics is primarily characterized by its ability to recommend actions based on potential outcomes. This type of analytics goes beyond merely analyzing past data or identifying patterns; it actively provides guidance on what actions should be taken to achieve desired results or mitigate risks. In contrast to options that focus solely on historical data or prediction of future trends, prescriptive analytics integrates various data sources, statistical methods, and algorithms to suggest specific actions. For example, businesses can use prescriptive analytics to determine the best course of action for inventory management by evaluating different potential decisions' impacts on profitability and efficiency. By recommending actions, prescriptive analytics empowers organizations to make informed decisions that are strategically aligned with their goals, addressing uncertainties and optimizing their operations. This is what sets it apart from other analytical approaches that may focus more on analysis or forecasting without providing actionable solutions.