Custom distributions for Monte Carlo

General discussion and questions about project risk management and risk analysis software RiskyProject. Includes discussion on how to perform efficient project risk analysis using our software.

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Leonardo
Posts: 8
Joined: Fri Mar 03, 2006 1:43 pm
Location: Philippines

Custom distributions for Monte Carlo

Post by Leonardo » Thu Oct 22, 2015 3:41 pm

I noticed that you also have custom distributions in additional to all the others. We use triangular for all of our schedule risk analysis, but are looking at whether to use any of the others listed.

Intaver Support
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Joined: Wed Nov 09, 2005 9:55 am

Re: Custom distributions for Monte Carlo

Post by Intaver Support » Thu Oct 22, 2015 3:45 pm

As part of Monte Carlo schedule risk analysis, you must define a statistical distribution that defines the probability density function (PDF) of you estimates. All of the distributions that we provide are considered continuous distributions and they represent all possible values between the low and high boundaries. Custom distributions are generally used when you have historical data from previous projects with similar activities that you enter discrete values for each interval between the low and high estimates. Creating a custom distribution requires entering in intervals (as a percentage between 1-100) and how often a value for that interval will occur. In the example below we have duration estimate of 4-7 days with 9 intervals each with a percentage that the activity will be completed during that interval. The sum of the percentages of each bin should equal 100% probability.

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