Question

A retail company notices a sudden decline in online sales during the last quarter. The data analytics team decides to investigate the underlying causes of this drop. They begin examining customer behaviour patterns, website traffic, and product return rates to identify factors contributing to the decline. Which type of data analytics is the team primarily using?

• A. Descriptive Analytics
• B. Diagnostic Analytics
• C. Predictive Analytics
• D. Prescriptive Analytics

Hint:

Remember: Descriptive = What happened, Diagnostic = Why it happened, Predictive = What will happen, Prescriptive = What should be done.

Answer 1

The Correct Option is B

Step 1: Understanding the scenario.
The company is experiencing a decline in sales and is trying to find the reasons behind it by analyzing various factors such as customer behavior, traffic, and return rates.

Step 2: Understanding types of analytics.
• Descriptive Analytics: Tells what has happened in the past. • Diagnostic Analytics: Explains why something happened. • Predictive Analytics: Forecasts future trends. • Prescriptive Analytics: Suggests actions to take.
Step 3: Matching with the scenario.
Since the team is investigating the cause of the decline, they are focusing on understanding why it happened, which is the main goal of diagnostic analytics.

Step 4: Conclusion.
Thus, the correct type of analytics being used is Diagnostic Analytics.
Final Answer: Diagnostic Analytics.