Descriptive VS. Diagnostic VS. Predictive VS. Prescriptive Analytics

• Descriptive analytics answers the questions what happened and Diagnostic analytics answers why did it happen. Descriptive analytics looks at past performance and Diagnostic analytics understands that performance by mining historical data to look for the reasons behind past success or failure. Most management reporting - such as sales, marketing, operations, and finance - uses this type of post-mortem analyses.
• Predictive analytics answers the question what will happen. This is when historical performance data is combined with rules, algorithms, and occasionally external data to determine the probable future outcome of an event or the likelihood of a situation occurring.
• Prescriptive analytics suggests actions how can we make the predicted results happen and also suggests decision options on how to take advantage of a future opportunity or mitigate a future risk (as the results of predictive analytics) and shows the implication of each decision option. Prescriptive analytics can continually take in new data to re-predict and re-prescribe, thus automatically improving prediction accuracy and prescribing better decision options.