A company collects data on customer purchase habits through their online store. Which of the following BEST explains how this data can be used to create information that is valuable to the business?
Performing regular server maintenance to ensure data integrity
Encrypting the data to prevent unauthorized access
Storing the data in a secure database for future use
Analyzing the data to understand buying trends and inform inventory management
Option A is correct because by analyzing the collected data on customer purchase habits, the company can gain insights into trends and patterns which can inform business strategies such as inventory management and marketing campaigns. This process transforms raw data into actionable information. Option B is incorrect as data encryption is more about securing data rather than creating information. Option C is incorrect because data storage is simply the saving of data and does not involve the analysis or transformation into information. Option D is incorrect as server maintenance ensures the availability and performance of the server but does not contribute to the creation of meaningful information from data.
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What are buying trends, and why are they important for businesses?
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How does inventory management benefit from analyzing customer purchase data?
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What is the process of transforming data into actionable information?