What is an example of predictive analytics application in business?

Customer churn prediction is a prime example of a predictive analytics application in business. This process involves analyzing historical customer data to identify patterns and trends that indicate whether customers are likely to stop using a company's products or services. By employing various statistical techniques and machine learning algorithms, businesses can forecast customer behavior, allowing them to take proactive measures to reduce churn. This may include targeted marketing strategies, personalized communication, or the development of new offerings to enhance customer satisfaction and retention.

The other choices present activities that do not align with the objectives of predictive analytics. Creating random data lacks a basis in historical information and does not assist in making informed predictions. Analyzing historical data without a specific purpose fails to leverage insights that could lead to actionable strategies. Calculating company expenses refers more to basic accounting rather than predicting future trends, which is the essence of predictive analytics. Thus, customer churn prediction stands out as a clear application of predictive analytics in business contexts.