Predictive versus prescriptive analytics

Predictive analytics is a practice of using advanced algorithms and ML to process historical data, learning what has happened while uncovering unseen data patterns, interactions, and relationships. Predictive models provide actionable insights, but they don't say what action needs to be taken based on insights for best outcomes.

Prescriptive analytics, on the other hand, enable accurate decision-making for complex problems by using optimization models that are mathematical representations of business problems. These optimization models use solvers with sophisticated algorithms.

Often, we might question whether we should use predictive analytics or prescriptive analytics. The answer to that is we need both, and to illustrate the point, let's use a simple example. Throughout the Covid-19 pandemic, ML models have been used to forecast the demand for protective masks, but complementing this information with prescriptive analytics...