Few days ago I read a post by Javier Lafuente Garcia clarifying the differences between predictive and prescriptive analytics. The author lays clear and concise definitions as well as points some applications of each type. I like the way he does that and I would like to share it.
Here are the definitions:
"Predictive Analytics is the application of advanced
mathematical techniques, such as statistics or machine learning to
predict missing data. It provides very valuable information to support
decision-making, although it does not automate decision-making itself. "
So predictive analytics is any method to estimate something we do not know - future market size, customer's propensity to call, etc.
"Prescriptive Analytics is in charge of automating
decision-making, either through the use of Business Rule Management
Systems, when the decision process is systematic, or with Mathematical
Optimization algorithms when it is not. It is enormously helpful in the
decision process, improving operating efficiency of the companies using
it, and differentiating them from their competitors in today’s changing
and competitive market."
Prescriptive analytics is anything related to decision making. Every optimization of processes, market analysis for prospective business with a "go/no go" recommendation,etc falls under this type. It does not necessarily involve predictive analytics although often forecasting is an organic part of the process.
The author extends on the prescriptive analytics types and gives details on business rules management systems and mathematical optimization - again in a nice concise manner. Read the article for further details.