Prescriptive Analytics Overview PDF

Arpee C. Arruejo, DIT Illah Diva R. Faypon, BSIT Shareen A. Navarro, DIT Eileen Rose C. Quilon, DIT DESCRIPTIVE VS PREDICTIVE VS PRESCRIPTIVE ANALYTICS  Prescriptive analytics is an statistical method used to generate recommendations and make decisions based on the computational finding...

Arpee C. Arruejo, DIT Illah Diva R. Faypon, BSIT Shareen A. Navarro, DIT Eileen Rose C. Quilon, DIT DESCRIPTIVE VS PREDICTIVE VS PRESCRIPTIVE ANALYTICS  Prescriptive analytics is an statistical method used to generate recommendations and make decisions based on the computational findings of algorithmic models. Prescriptive analytics focuses on finding the best course of action in a scenario, given the available data. It’s related to both descriptive analytics and predictive analytics, but emphasizes actionable insights instead of data monitoring.  Graph analysis Simulation Complex event processing, which involves combining data from multiple sources to infer patterns and model complex circumstances Neural networks, or combinations of various machine learning algorithms designed to process complex data Recommendation engines, which are computer algorithms designed to predict positive or negative preference based on what users have chosen in the past Heuristics, or alternative methods of problem solving that can approximate an answer when finding a definite one fails Machine learning.  Predictive Prescriptive An insightful forecast from predictive Prescriptive analytics require complex analysis can be analyzed using specific algorithms in order to accomplish such models designed for prescriptive machine-based decision-making. analysis in order to produce automated recommendations or solutions. With predictive analytics, it is For prescriptive analytics, however, understood that predictions may or there is an element of risk when using may not happen. automated recommendations: human behavior can be unpredictable.  HOW DOES PRESCRIPTIVE ANALYTICS WORK? Prescriptive analytics lies in finding the right way to arrive at the solution, given the data you have on hand. Prescriptive analytics begins with acknowledging the fact that there is a problem that requires a solution.  HOW DOES PRESCRIPTIVE ANALYTICS WORK? Here’s an example: Training personnel can use predictive analytics to learn that a significant proportion of learners might not be able to complete a specific course without acquiring a particular skill. Prescriptive analytics can help you design an algorithm that can detect people lacking specific expertise in question. It can then proceed to send an automated message or recommendation to such persons urging them to acquire the skills before enrolling for the training course.  EXAMPLES OF PRESCRIPTIVE ANALYTICS IN ONLINE LEARNING 1. There are some tools that use prescriptive analytics to identify what content the learner has already learned so that new content not yet mastered is presented instead. This is an example of how prescriptive analytics is finding its way into adaptive learning. 2. Some LMS’s enable administrators to define specific rules in order for automated feedback or actions to take place; for example, if an employee is struggling to complete a training course, the system may recommend they look at a different resource to obtain skills needed for the previous course. 3. Some LMS’s are promising to reduce training time for employees by determining previous knowledge and proficiency baselines in order to recommend which training courses or resources are best suited for the learner.  ADVANTAGES OF PRESCRIPTIVE ANALYTICS 1. Generation of revenue 2. Management of Gross 3. Reduction of Margins expenses Prescriptive analytics applications can provide detailed as well as Prescriptive analytics techniques When you apply prescriptive timely information about the when employed along with analytics techniques, it customers’ preferences. It also predictive analytics can provide becomes easy to manage allows business managers to gainful insights into the optimal inventory levels. You have a identify new opportunities for product mix for the given and definite plan of action to cross-selling and accelerating the anticipated market conditions. achieve a specific objective. regular sales cycles at the same Therefore, there is no need time. to store inventory for long durations.  PRESCRIPTIVE ANALYSIS APPLICATIONS IN BUSINESS Organizations use prescriptive analytics techniques to decide optimum sourcing It considers various factors like locations, logistics routes, and optimum demand and supply position in the quantity to reduce expenses and save market, thereby ensuring to hold costs. the right levels of inventory to ensure proper capital utilization. One of the best examples is that of the Google self-driving car. The vehicle has to make millions of calculations much in the same way we do when driving our cars.  WHY PRESCRIPTIVE ANALYSIS MATTERS TO YOUR BUSINESS? Calculate past sales of a product to determine the number of replacements. Know the tendency of customers in certain products to launch marketing campaigns, according to users’ needs. Predict equipment failures, which provides for maintenance at the right time. Know customers’ purchasing habits and punctuality of payment to determine whether it is appropriate to grant credit. PRESCRIPTIVE ANALYSIS HAS BENEFITS SUCH AS: Optimization of processes, campaigns, and strategies. Minimizes maintenance needs and interconnects them for better conditions. Reduce costs without affecting performance. It increases the likelihood that companies will approach and plan for internal growth properly. Qualitative research method — know the characteristics that distinguish it. Production optimization. Efficient supply chain management. Improved customer service and experience. Improvado is a data analytics tool designed by marketers, for marketers, and provides a way for them to get all of their data in one place, in real-time through automated dashboards and reports. Improvado is customized for its users. The best way to customize the platform to your specific needs and receive pricing details is to set up a call with them. Improvado has 150+ integrations. They will build out custom integrations for any data source you request.  RapidMiner offers artificial intelligence and prescriptive analytics to companies through an open and extensive data analytics platform. This centralized platform features a powerful and robust graphical interface that enables users to create, maintain, and deliver predictive analytics. The tool also includes scripting support in multiple programming languages. Pros Cons Can connect boxes on a canvas to Can be buggy at times conduct data analysis Plethora of data analytics and Limitations with some versions visualization tools No coding skills required Free version available Sisense lets users easily transform their data into stunning interactive reports. The tool’s visualization capabilities include a drag-and-drop, simple user interface, which allows for charts and more complex graphics, along with interactive visualizations, to be easily created. Sisense boasts over 100 data connectors.  Knime is an open source BI tool for data integration, reporting, and analytics. It features a visual interface that includes nodes for a range of activities, from extracting data to presenting it. The platform is primarily focused on statistical models. Knime is an open source platform. Knime offers a variety of integrations for their platform. Pros Cons More than 100 modules Nodes are not as customizable as Python/R libraries, though for that Python/R node can be used Visual user interface that doesn’t Can run rather slow, particularly when require programming knowledge more extensions and nodes are installed Connect nodes through a drag-and- There can be a steep learning curve for drop interface users who haven’t used a similar tool  Tableau is a business intelligence tool that helps organizations turn their data into impactful, actionable insights. Tableau’s drag-and-drop feature helps users create interactive dashboards with advanced visual analytics. Tableau offers two different sets of prices for its software. One set of prices for installing the software on-premise and another for the software hosted by Tableau. Tableau offers the ability to connect to an extensive list of data sources.  Key Takeaways of Prescriptive Analytics Prescriptive analytics works in combination with predictive analytics to find the right ways to achieve the objectives of the business. Thus, it needs data to determine near-term outcomes. The most significant benefit of prescriptive analytics is that it helps organizations take well-informed steps based on facts and probability- weighted projections. When you have a prescriptive analytical solution at work, you remove the concept of finding a solution based on instinct. It helps make use of machine learning, thereby ensuring that the business decides on the optimum course of action depending on predictive analytics.