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Unit 2

The document outlines four types of data analytics: Descriptive, Diagnostic, Predictive, and Prescriptive. Descriptive analysis summarizes past data to identify trends, while diagnostic analysis investigates the reasons behind those trends. Predictive analytics forecasts future events, and prescriptive analytics provides actionable recommendations based on those predictions.

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permeshwar245
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2 views

Unit 2

The document outlines four types of data analytics: Descriptive, Diagnostic, Predictive, and Prescriptive. Descriptive analysis summarizes past data to identify trends, while diagnostic analysis investigates the reasons behind those trends. Predictive analytics forecasts future events, and prescriptive analytics provides actionable recommendations based on those predictions.

Uploaded by

permeshwar245
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Types of Data Analytics

Unit 2
Contents
• Types of data analytics

• Difference between data analytics and data science


Descriptive Analysis
• Descriptive analysis answers the “what happened” by summarizing
past data.
• It is the process of using current and historical data to identify trends
and relationships.
• It’s sometimes called the simplest form of data analysis because it
describes trends and relationships but doesn’t dig deeper.
• The biggest use of descriptive analysis in business is to track Key
Performance Indicators (KPIs).
• KPIs describe how a business is performing based on chosen
benchmarks.
• Example: Monthly Sales Report, Demand Trends
Descriptive Analysis: Example
Diagnostic Analysis
• After asking the main question of “what happened”, the next step is
to dive deeper and ask why did it happen?
• This is where diagnostic analysis comes in.
• Diagnostic analysis takes the insights found from descriptive analytics
and drills down to find the causes of those outcomes.
• Organizations make use of this type of analytics as it creates more
connections between data and identifies patterns of behavior.
• Example: Investigating the reasons behind a sudden spike in product
sales or customer complaints, Explaining customer behavior.
Predictive Analysis

• Predictive analytics is the use of data to predict future trends and


events.
• It uses historical data to forecast potential scenarios that can help
drive strategic decisions.
• The predictions could be for the near future—for instance, predicting
the malfunction of a piece of machinery later that day—or the more
distant future, such as predicting your company’s cash flows for the
upcoming year.
• Example :
• Entertainment & Hospitality: Determining Staffing Needs
Prescriptive Analysis
• Which answers the question, “What should we do next?”
• Prescriptive data analytics provides recommendations or solutions for
potential future scenarios based on the results of predictive analytics.
• Prescriptive analytics is about the future.
• It offers a roadmap to help businesses prepare for upcoming challenges
and pinpoint opportunities before they arise.
• Prescriptive models can transform raw data into concrete steps, ensuring
organizations not only understand their data but act on it effectively.
• This actionable nature means decisions are data-backed, reducing reliance
on gut feelings or intuition and reducing the potential for bias or emotion
to creep in.
Difference Between Predictive and Prescriptive
Analytics?
• Predictive analytics forecasts potential future outcomes based on past
data.
• Prescriptive analytics uses a wide range of data to create specific,
actionable recommendations for these predictions.
• Predictive analytics often uses structured historical data (e.g. credit
histories, transactional data, customer data).
• Prescriptive analytics commonly uses hybrid data; a combination of
structured data and unstructured data (e.g. videos, pictures, and
documents).
• The same predictive analytics model will always provide identical
predictions based on the same data.
• Prescriptive analytics models constantly require updating with new data to
keep recommendations relevant.

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