4.6 Analytics and Model Building

Question 1

Model-Building Methodologies

Answer 1

Designed to help achieve better business decisions

1. Descriptive
2. Diagnostic
3. Predictive
4. Prescriptive

Question 2

Descriptive Analytics

Answer 2

Looks at HISTORICAL data for insights into what could happen in the future; patterns within the historical data to try to find the reason for a particular outcome

Question 3

Predictive Analytics

Answer 3

Uses STATISTICAL techniques to determine the probability of a future outcome

Looks at historical data for patterns, then applies algorithms for predictions
(need to ensure the right algorithms are developed to find meaningful patterns)

Question 4

Diagnostic Analytics

Answer 4

Answers the question: WHY did it happen - attempts to understand what is causing the issue

Question 5

Prescriptive Analytics

Answer 5

Combines all (3) methods to provide recommendations and identify implications of these recommendations - why will this happen?

Question 6

Modelling

Answer 6

Having data organized in a way that produces reports with meaning/connections; a place to STORE data

Organizes data in a STANDARD FORMAT
The data from these reports are used to make decisions

Question 7

Data-Driven Decisions

Answer 7

Once relationships are defined & validated, they are used to produce reports to support data-driven decisions