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.

If you're not fitting to existing data, here are some things to think about:

There's more than one way to specify a distribution. Every distribution has standard parameters that you can enter explicitly, as numbers or cell references. But you might prefer to specify distributions by means of percentiles, as a way of specifying those parameters implicitly. To do this, in Define Distributions select the Alt Parameters tab, and you'll see the distributions that can be specified by means of percentiles. On the other hand, if you know the mean, standard deviation or variance, skewness, and kurtosis that you want, the RiskJohnsonMoments distribution may be a good choice.

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.

Additional resources:

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

Last edited: 2017-06-19

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