Palisade Knowledge Base

HomeTechniques and Tips@RISK DistributionsEntering Parameters for Log-normal Distribution

3.30. Entering Parameters for Log-normal Distribution

Applies to:
@RISK, all releases
RISKOPTIMIZER, all releases
RDK and RODK, all releases

The RiskLognorm( ) function doesn't behave like the log-normal function in the books. When I enter μ=4, σ=2, I expect the simulated distribution to have a mean of 54.6 and standard deviation of 2953.5, but instead the mean and standard deviation are very close to 4 and 2. What's wrong?

@RISK, RISKOptimizer, and the developer kits have two log-normal distributions. RiskLognorm2( ) is the traditional distribution and behaves in the way described in statistics books. We also offer RiskLognorm( ), where the μ and σ (mu and sigma) you enter are the actual mean and standard deviation of the distribution, subject to the usual sampling fluctuation. The two distributions are the same except for the way you enter parameters.

These three methods are illustrated in the accompanying workbook.

Additional keywords: Lognorm distribution, Lognorm2 distribution

Last edited: 2015-06-19


This page was: Helpful | Not Helpful