Which type of analytics is used to determine potential future outcomes?

Disable ads (and more) with a membership for a one time $4.99 payment

Study for the University of Central Florida QMB3602 Business Research for Decision Making Exam 1. Prepare with detailed questions and in-depth explanations to excel in your test! Enhance your decision-making skills effectively.

Predictive analytics is focused on analyzing historical data to forecast future outcomes. It uses statistical techniques and machine learning algorithms to identify patterns and trends in existing data, which helps in estimating what might happen next. This type of analytics is essential for decision-making, as it allows businesses to anticipate future events based on the insights derived from past behavior.

Descriptive analytics, on the other hand, summarizes historical data to provide insights into what has happened in the past. It offers a foundational understanding of past performance but does not predict future outcomes.

Diagnostic analytics dives deeper into data to determine the causes of past events. It seeks to explain why something occurred rather than predict what might happen next, making it different from predictive analytics.

Prescriptive analytics takes things a step further by providing recommendations for actions based on the predictions about future outcomes. While it guides decision-making, it uses input from predictive analytics as one of its foundations.

Therefore, the focus of predictive analytics on forecasting future outcomes makes it the correct answer.