HomeTechniques and Tips@RISK DistributionsWhich Distribution Should I Use?

3.1. Which Distribution Should I Use?

How do I know which probability distribution I should use?  Do you have some book you can refer me to?

Different industries tend to prefer a different selection of distributions.  We don't have any one book that directly addresses your question, but we do have a number of resources to offer, both within @RISK and externally.

One very powerful tool, assuming you have the Professional or Industrial Edition, is distribution fitting.  This lets you enter historical data; then @RISK attempts to fit every relevant distribution to the data.  You can instantly compare different distributions to see which one seems best suited to the data set.

Your first decision is whether you need a continuous or discrete distribution. Continuous distributions can return any values within a specified range, but discrete distributions can return only predefined values, usually whole numbers.

If you have a general idea of the shape of distribution you want — symmetric or skewed? strong central peak or not? bounded or infinite at left and right? — click Define Distributions, select the Discrete or Continuous Tab, and pick a shape that matches what you're looking for. You may want to specify distributions by means of percentiles, select the Alt Parameters tab instead. After you select a distribution, the Define Distribution window gives you instant feedback about the shape and statistics of the distribution as you alter the parameters or even the functions themselves.

If you know the mean, standard deviation or variance, skewness, and kurtosis that you want, the RiskJohnsonMoments distribution may be a good choice.

Additional resources:

Additional keywords: Johnson Moments, Choose a distribution, Picking a distribution

Last edited: 2017-06-19

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