ACCA PM · Chapter 1 · Question 6 of 9
A subscription software business uses three years of customer usage data to build a model that estimates the probability that each current customer will cancel during the next quarter. Which type of data analytics is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Predictive analytics
Explanation
Predictive analytics uses historical data and statistical models to forecast what is likely to happen in future, such as the probability of a customer cancelling. Descriptive analytics summarises what has happened, diagnostic analytics explains why it happened, and prescriptive analytics recommends the action to take.
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