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5.8. Correlation of RiskCompound

Applies to: @RISK 5.x–7.x

I have a risk register with columns for cost and schedule risk, and I'm using formulas like these:

=RiskCompound(RiskBinomial(1,D5), RiskTriang(F5,G5,H5), RiskName("Cost"))

=RiskCompound(RiskBinomial(1,D5), RiskTriang(I5,J5,K5), RiskName("Duration"))

The RiskBinomial with n = 1 indicates that the risk will or will not happen, with the probability given in cell D5. But here's my problem. In some iterations, the cost risk is zero but the duration risk is nonzero, or vice versa. Logically I want them to be zero or nonzero together.

The RiskCompound( ) function itself can't be correlated, because @RISK has no way to know in advance how many times it will need to draw values from the severity distribution during the simulation. However, you can correlate elements of the RiskCompound, as follows:

By the way, @RISK 6.0 and later offer a Bernoulli distribution for events that may or may not happen. In those releases of @RISK, you could replace RiskBinomial(1,D5) with RiskBernoulli(D5).

For more about RiskCompound( ), see All Articles about RiskCompound.

Additional keywords: Compound distribution

Last edited: 2018-06-28


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