What is a probability density function?

This forum includes discussion about project risk analysis and risk management theory: Monte Carlo simulations, Event Chain Methodology, schedule and cost risk analysis. Please submit questions and case studies about your experience with our project risk analysis software.

Moderator: Intaver Support

Post Reply
NTT
Posts: 24
Joined: Sun May 27, 2007 4:51 pm
Location: Boston, MA

What is a probability density function?

Post by NTT » Tue Aug 28, 2018 2:53 pm

In some documentation about Monte Carlo estimates, it seems that they are been referred to as statistical distributions and probability density functions. Is the probability density function the same thing?
risk manager

Intaver Support
Posts: 992
Joined: Wed Nov 09, 2005 9:55 am

Re: What is a probability density function?

Post by Intaver Support » Tue Aug 28, 2018 2:55 pm

In statistics, statistical distribution and probability density (PDF) functions describe the same thing and can be considered interchangeable. PDFs mathematically describe the probability that an outcome will occur over a range of possible outcomes. In the example below, we have a triangular distribution that ranges from 40 to 60 days with a most likely at 46 days (x axis). On the y-axis, we can see the probability that any value will occur. For example if we draw a straight line across from the highest probability, which is the most likely estimate of 46 days, we can see that this value has .1 or 10% chance of occurring.

Image
Intaver Support Team
Intaver Institute Inc.
Home of Project Risk Management and Project Risk Analysis software RiskyProject
www.intaver.com

Post Reply