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Analytics––descriptive, predictive and prescriptive is a rapidly evolving field that gives companies the knowledge to make smarter business decisions. It provides valuable insight into past performance and future prediction and decision guidance. According to Gartner, the number of companies using prescriptive analytics tools may increase from ~10% in 2016 to over 35% by the end of 2020. Gurobi Optimizer is one of these tools: a math programming solver. While prescriptive analytics is growing, analytics overall is still dominated by descriptive (what happened in the past) and predictive (what is likely to happen in the future) tools. As a result, it’s important to see how prescriptive analytics fits into the broader analytics landscape.
Descriptive Analytics gives insight into the past and current state of your business through the use of business intelligence tools. These tools can help you obtain a range of insights into your business, such as:
Most business functions in your company are already using descriptive analytics in the form of recurring or custom reports. With analytics tools, you can dive deeper into the past and retrieve meaningful results. You can also conduct Diagnostic Analytics which focuses on understanding why something happened, as part of your descriptive analytics activities.
Predictive Analytics seeks to provide insight into what the future may hold for your business. It takes existing data and applies statistical techniques often using machine learning. Results may be coarse-grained (e.g., expected industry growth or raw material pricing), company-centric (e.g., revenue or profit growth), or operational (e.g., expected changes in demand by product line).
Prescriptive Analytics applies computational sciences, typically through math programming models, to optimize a set of decisions for directing a given business situation. Utilizing this tool in support of achieving desired business outcomes will bring specific direction and high value to your business. By building a decision model and using a math programming solver, you can:
For example, Prescriptive Analytics could answer these business decision questions:
Subject to a range of constraints:
To maximize or minimize your objectives
The result is improved decisions, increased profitability and saved time for your business.
Used as the primary tool in prescriptive analytics, mathematical programming solvers, such as the Gurobi Optimizer, help transform data and models into smarter business decisions.
Leveraging a broad range of programming languages, users can:
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