As companies integrate data analytics and shift their focus towards the future, they will need to utilize predictive analytics. This kind of analytics uses both historical data and statistical models to predict future outcomes. If a company is interested in looking more closely at its sales department, then what is an appropriate question to answer using predictive analytics?
A) How can we correct a budget deficit from last year in the new financial plans?
B) How would the addition of a 5% bonus impact the compensation expenses for last year?
C) How would the addition of a 5% bonus impact the net income for the current year?
D) What is the budget-to-actual comparison for profits for the past two years?

Question

Quizplus · Accepted Answer

This question requires familiarity with data analytics and more specifically the methodology of predictive analytics. Choice C is correct because it uses existing data to make a prediction about how a change to the current setup would impact something in the future. The remaining choices are incorrect because they describe other types of data analytics, especially focusing on past events and already decided outcomes rather than a predictive future focus.

As Companies Integrate Data Analytics and Shift Their Focus Towards