What is the function of prescriptive analytics?

Prescriptive analytics plays a crucial role in the decision-making process by recommending specific actions to achieve desired outcomes based on data insights. This type of analytics goes beyond merely analyzing past trends or predicting future events; it actively suggests how to optimize processes, allocate resources, or make strategic choices to improve results.

For example, a business might use prescriptive analytics to determine the best pricing strategy for a new product by considering various factors such as customer behavior, market conditions, and costs. By leveraging algorithms and models, prescriptive analytics not only highlights what actions are possible but also evaluates the potential impact of those actions, guiding decision-makers in selecting the most effective strategies.

This capability to provide actionable recommendations is what distinguishes prescriptive analytics from other analytics forms, such as descriptive analytics, which focuses on summarizing historical data, or predictive analytics, which aims to forecast future outcomes based on past patterns.