BUSINESS MODELS 4
Running head: BUSINESS MODELS 1
Business Analytics Methods and Models
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Business Analytics Methods and Models
Descriptive Data are various methods and models within business analytics and involves the process of reducing data and summarizing historical data to make an essential decision in the organization. Descriptive data are used merely to provide summaries about some samples and the measures. For example, companies can use this to analyze their sales projection within a specified period (Bell, 2018). Descriptive data is used to present raw data in a more meaningful and visible way. There are four types of descriptive data, and they include; frequency measure, a measure of central tendency, a rule of variation, position measure.
Predictive data involves the process of “extracting data” from a set of data to determine the patterns and future trends and outcomes. It can be used by businesses analyzing their current marketing strategies to identify the trends and results in terms of sales in the future. The companies can use predictive data to determine the future pricing strategies of their products in the market (Bell, 2018). For predictive analysis to be useful, there must be a set of variables or data, where the review will be extracted from a set of data.
Prescriptive data is a branch of business analytics which is dedicated to seeking the best course of action for a given circumstance/situation. In a business perspective, it can be used to determine a problem probably from low sales trends and find the best course of action, after seeing the extent of that specific problem in a business (Bell, 2018). This model can also be used to draw up some recommendations and solutions that will be geared towards solving that particular problem. This is a form of advanced data analysis as it deals with narrowing down the results of each given data to come up with possible solutions. This is an essential analytical data for businesses as opposed to other forms of business models.
Figure 1: Analysis of the differences between descriptive, predictive and prescriptive data
References
Bell, D. E., Raiffa, H., & Tversky, A. (2018). Descriptive, normative, and prescriptive interactions in decision making. Decision making: Descriptive, normative, and prescriptive interactions, 1, 9-32.