Choosing an Appropriate Distribution
What you'll learn
- How to select the best distribution for your @RISK models
Requirements
- Basic knowledge of @RISK and Excel
Description
Current @RISK users, both novices and experts, business and financial analysts, economists, statisticians, scientific researchers using @RISK or any other Monte Carlo simulation platform may greatly benefit by taking this course. Students who also want to be introduced to @RISK as a general simulation methodology will benefit from this course.
It is intended to answer the common question modelers have whenever they are building a model: How to choose appropriate distributions for the variables, or “moving parts” of a Monte Carlo simulation model they are attempting to build. The principle of GIGO (“garbage in, garbage out”) applies here dramatically well. Build a model with appropriate distributions that clearly reflect the statistical nature of your variables and you will end up with a robust model to withstand reality testing. Build a model with lousily chosen distributions and your model will be as weak and questionable as any of your input variables.
This course starts by introducing a decision tree as a structure to help decide on multiple distributions. The world of statistical distribution functions is endless. @RISK uses some 97 different distribution functions to choose from. And this is not the end of it, since you can create, as we will show, your own distributions.
Who this course is for:
- Users of @RISK or of any other Monte Carlo simulation software
Instructor
- 4.0 Instructor Rating
- 249 Reviews
- 1,170 Students
- 9 Courses
Fernando Hernandez has served as senior risk and decisions consultant and instructor for Palisade Corporation since 2003. As such, he has developed risk quantification models in North, Central and South America, Europe, Australia, Africa and the Middle East for clients in multiple industries such as project management, oil & gas, mining, telecommunications, transportation, manufacturing, finance, banking and insurance. He has taught courses and given lectures on risk quantification, decision making, optimization, statistics and strategic finance. He has delivered over 10,000 hours on the past fifteen years of his consulting/training practice, having visited more than 150 clients in some thirty five countries.
Prior to his involvement as a consultant in Palisade Corporation, Fernando chaired CFO positions in multinational and local companies in various industries: banking, manufacturing, hospital services, consumer goods, information technology. He also taught MBA courses such as: Introduction to Corporate Finance, Financial Simulation and investment Decisions. Since 1992, he has built financial models, risk models and feasibility studies using @RISK.
Fernando earned his degree in Financial Management at the University of Costa Rica. As a Fulbright scholar awarded by the U.S. government, he obtained an MBA from Indiana University with a major in Finance and Management Information Systems.