Prescriptive analytics, an area of Business analytics does exactly what the term implies to “prescribe” a number of different possible actions based on prior outcomes. In short, it recommends specific actions.
A relatively new field of prescriptive analytics uses optimization and simulation algorithms to provide recommendations on possible outcomes and answer user: “What should we do”. In a nutshell, this third and final phase of business analytics is all about finding the best way of action for a given situation. This analytics is also associated with descriptive and predictive analytics. The prescriptive analysis goes beyond descriptive and predictive analytics knowing by providing one or more possible courses of action.
It not only predicts what will happen but also why it will happen to provide advice regarding actions that will take the power of the predictions. Large companies are using prescriptive analytics successfully in order to optimize production, in the process of scheduling and inventory in the supply chain to make sure that are delivering right products and at the right time and thus optimizing the customer experience.
Based on previous experiences, the goal of this analytics is to empower quality improvements, service enhancements, cost reductions, and increased productivity.
Prescriptive analytics is an explanatory advancement in the field of analytics. It helps to enhance decision making and processes better results. It is the relatively complex task to administer prescriptive analytics and thus most companies do not use them in their daily course of business activity. But if executed correctly, this analytics can have a great influence on how companies make decisions and on the business bottom line.