What is prescriptive analytics and how does it work: a basic guide

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When it comes to analyzing data, we've talked about different methodologies. And today we want to talk to you about prescriptive analysis , a system that will help you make decisions and know the steps to follow to get the best results: discover what it is , how it works , and some examples with this basic guide.

What is prescriptive data analysis?
Prescriptive data analytics is an advanced analytics methodology that uses algorithms, mathematical models, and simulations to suggest specific actions based on data .

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Unlike descriptive analytics, which focuses on explaining what has happened, and predictive analytics tries to anticipate what will happen next, prescriptive analytics recommends what to do next to optimize outcomes . This makes it perfect for making quick decisions in all kinds of industries.

How does prescriptive data analytics work? It first sweden phone number lead performs predictive analysis using historical data to identify trends, patterns, and relationships between variables.

Once you have possible scenarios, prescriptive analysis uses optimization techniques to identify the best option or set of options . Thanks to this, you will be able to minimize costs, balance resources to improve operational efficiency, and more.

How does it do this? Through simulations that allow you to test multiple scenarios in controlled environments. This allows you to solve high-risk situations, where you have to evaluate all kinds of results to know the best decision.

Prescriptive analytics also relies on machine learning techniques , such as neural networks and supervised or unsupervised learning algorithms. There are all kinds of services that offer this type of data analysis, such as Watson Analytics.

Prescriptive Analytics: Examples
Now that you know what prescriptive data analysis is and how it works, here are a few examples to help you understand why it is such a comprehensive tool for all types of sectors.

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Let's say you own a retail store and want to manage your inventory better ; you have inventory issues and you plan to optimize the process. With prescriptive data analysis, you can find a balance between not having enough stock and having too much.

This analysis will determine sales patterns and demand predictions to determine how much stock will be needed . You will also be able to simulate different scenarios (a Black Friday , for example) to account for this variance and use optimization models to calculate the optimal amount of inventory at each store and location.

And if you have a transport and logistics company, prescriptive data analysis will help you optimize delivery routes and reduce operating costs . Remember that it will take into account possible delays based on traffic and weather conditions, in addition to optimizing and arriving, maximizing the number of deliveries and minimizing costs in fuel or time.

At MASMOVIL NEGOCIOS we hope to have helped you understand this concept and how it works. As you have seen, it is a very useful resource in all types of sectors, so it is important that you know what it is and how to apply it.