Definition
Predictive Analytics is a type of analysis that uses historical data and statistical models to estimate future events or outcomes.
Human Explanation
It answers the question: What is likely to happen?
Why it Matters
It enables organisations to prepare earlier for possible events and reduce risk.
Conceptual Boundary
Predictive Analytics does not predict the future with certainty. It produces estimates whose usefulness depends on the available data, assumptions, model quality and operating context.
Practical Perspective
It is used in areas such as sales forecasting, equipment failure prediction and resource demand forecasting.
Analytical Progression
- Descriptive: What happened?
- Diagnostic: Why did it happen?
- Predictive: What is likely to happen?
- Prescriptive: What should we do?
A forecast supports preparation, but it does not determine which action should be selected.