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RISKview45.pdf
Guide to Using
RISKview
Distribution Viewing for
Windows
Version 4.5
October, 2004
Palisade Corporation
31 Decker Road
Newfield, NY USA 14867
(607) 277-8000
(607) 277-8001 (fax)
http://www.palisade.com (website)
[email protected] (e-mail)
Copyright Notice
Copyright © 2004, Palisade Corporation.
Trademark Acknowledgments
Microsoft, Excel and Windows are registered trademarks of Microsoft, Inc.
IBM is a registered trademark of International Business Machines, Inc.
Palisade, TopRank, BestFit and RISKview are registered trademarks of Palisade
Corporation.
RISK is a trademark of Parker Brothers, Division of Tonka Corporation and is used under
license.
Welcome
Welcome to RISKview, the distribution viewing companion for any
Windows software. RISKview helps you select a probability
distribution graphically by previewing different distributions and
parameters before introducing them to your model. RISKview also
includes the Distribution Artist, a tool which extracts data points from
a probability curve that you draw.
Why You Need RISKview
RISKview takes the guess-work out of selecting a distribution by
allowing you to visually assess the curve. Not sure how changing a
parameter affects the shape of a curve? RISKview shows you. Want to
know the vital statistics of the distribution before running a
simulation? RISKview tells you. Do you have a mental image of what
the curve should look like? RISKview translates your drawing to a
probability distribution function.
RISKview is great if you’re just learning about probability
distributions, but advanced users will find it useful too. We have all
experienced times when we know what we want a distribution to
look like, but we don’t know how to translate that mental image to a
distribution function. RISKview allows you to visualize a distribution
function before introducing it to your simulation model.
Welcome
i
List of Features
RISKview and
@RISK
Although RISKview can run on its own, it is most useful when it is
integrated in @RISK, the risk analysis and simulation program from
Palisade Corporation. Every copy of @RISK for Excel contains a fully
integrated copy of RISKview. BestFit, Palisade's distribution fitting
software, also contains a fully integrated copy of RISKview. This
allows you to preview distributions while you are fitting distributions
to data.
Distribution
Functions
RISKview previews over 30 probability distribution functions, all
available in @RISK. And, RISKview tells you the vital statistics for
each function, including mean, mode, variance, skewness and
kurtosis.
The probability distributions provided by RISKview allow the
specification of nearly any type of uncertainty. Available
distributions include:
Beta
Gamma
Normal
BetaGeneral
General
Pareto
Beta-Subjective
Geometric
Pareto2
Binomial
Histogram
Pearson V
Chi-Square
Hypergeometric
Pearson VI
Cumulative
Inverse Gaussian
PERT
Discrete
IntUniform
Poisson
Discrete Uniform
Logistic
Rayleigh
Error Function
Log-Logistic
Student's t
Erlang
Lognormal
Triangular
Exponential
Lognormal2
Trigen
Extreme Value
Negative Binomial
Uniform
Weibull
Distribution
Artist
ii
Do you want to create your own probability distribution? Draw your
own curve using the Distribution Artist and let RISKview create a
GENERAL distribution function from the drawing. A smoothing
algorithm ensures that shaky hands don’t affect the final distribution.
Table of Contents
Welcome
i
Why You Need RISKview ....................................................................i
Chapter 1: Getting Started
1
Introduction .........................................................................................3
Installation Instructions .....................................................................7
Chapter 2: An Overview of RISKview
11
Introduction .......................................................................................13
What is a Probability Distribution Function?.................................15
Using RISKview ................................................................................17
Chapter 3: RISKview Reference Guide
27
Introduction .......................................................................................29
Reference: RISKview Icons .............................................................31
Reference: RISKview Commands
35
File Menu ...........................................................................................37
Edit Menu...........................................................................................39
Insert Menu........................................................................................41
Graph Menu .......................................................................................45
Artist Menu ........................................................................................53
Welcome
iii
Window Menu ................................................................................... 59
Help Menu ......................................................................................... 61
Appendix A: Using RISKview With Other DecisionTools
™
63
The DecisionTools Suite ................................................................. 63
Palisade’s DecisionTools Case Study ........................................... 65
iv
Appendix B: Glossary
69
Appendix C: Recommended Readings
73
Index
75
Chapter 1: Getting Started
Introduction .........................................................................................3
Checking Your Package ..........................................................................3
About This Version .................................................................................3
Working with your Operating Environment ......................................4
If You Need Help .....................................................................................4
RISKview System Requirements..........................................................6
Installation Instructions .....................................................................7
General Installation Instructions ..........................................................7
The DecisionTools Suite.........................................................................8
Setting Up the RISKview Icons or Shortcuts......................................9
RISKview 4.5 Help System © February,2002 Palisade Corporation
Chapter 1: Getting Started
1
2
Introduction
This introduction describes the contents of your RISKview package and
shows you how to install RISKview.
Checking Your Package
Your RISKview package should contain:
The RISKview CD-ROM including:
•
RISKview Program
•
The RISKview User’s Guide (this book)in PDF format with:
Getting Started
Overview to RISKview
RISKview Reference Guide
Technical Appendices
The RISKview Licensing Agreement
A complete listing of all files contained on the RISKview CD is contained
in the file INSTALL.LOG found in the Program
Files\Palisade\RISKVIEW45 directory on your hard disk.
If your package is not complete, please call your RISKview dealer or
supplier or contact Palisade Corporation directly at (607) 277-8000. If you
want to install RISKview from diskettes, please contact Palisade
Corporation.
About This Version
This version of RISKview can be installed as a 32-bit program for
Windows 98 or higher.
Chapter 1: Getting Started
3
Working with your Operating Environment
This User’s Guide assumes that you have a general knowledge of the
Windows operating system. In particular:
•
You are familiar with your computer and using the mouse.
•
You are familiar with terms such as icons, click, double-click, menu, window,
command and object.
•
You understand basic concepts such as directory structures and file naming.
If You Need Help
Technical support is provided free of charge for all registered users of
BestFit with a current maintenance plan, or is available on a per incident
charge. To ensure that you are a registered user of RISKview , please
register online at www.palisade.com/html/register.html.
If you contact us by telephone, please have your serial number and User’s
Guide ready. We can offer better technical support if you are in front of
your computer and ready to work.
Before Calling
4
Before contacting technical support, please review the following checklist:
•
Have you referred to the on-line help?
•
Have you checked this User's Guide and reviewed the on-line multimedia
tutorial?
•
Have you read the README.WRI file? It contains current information on
RISKview that may not be included in the manual.
•
Can you duplicate the problem consistently? Can you duplicate the problem
on a different computer or with a different model?
•
Have you looked at our site on the World Wide Web? It can be found at
http://www.palisade.com. Our Web site also contains the latest FAQ (a
searchable database of tech support questions and answers) and RISKview
patches in our Technical Support section. We recommend visiting our Web
site regularly for all the latest information on RISKview and other Palisade
software.
Introduction
Contacting
Palisade
Palisade Corporation welcomes your questions, comments or suggestions
regarding RISKview. Contact our technical support staff using any of the
following methods:
•
E-mail us at [email protected]
•
Telephone us at (607) 277-8000 any weekday from 9:00 AM to 5:00 PM,
EST. Press 2 on a touch-tone phone to reach technical support.
•
Fax us at (607) 277-8001.
•
Mail us a letter at:
Technical Support
Palisade Corporation
31 Decker Road
Newfield, NY 14867 USA
If you want to contact Palisade Europe:
•
E-mail us at [email protected]
•
Telephone us at +44 (0)207 426 9950 (UK).
•
Fax us at +44 (0)207 375 1229 (UK).
•
Mail us a letter at:
Palisade Europe
Technical Support
The Blue House, Unit 1
30 Calvin Street
London E1 6NW UK
Regardless of how you contact us, please include the product name, exact
version and serial number. The exact version can be found by by selecting
the Help About command on the RISKview menu.
Chapter 1: Getting Started
5
Student
Versions
Telephone support is not available with the student version of RISKview.
If you need help, we recommend the following alternatives:
•
Consult with your professor or teaching assistant.
•
Log-on to our site on the World Wide Web for answers to frequently asked
questions.
•
Contact our technical support department via e-mail or fax.
RISKview System Requirements
System requirements for RISKview depend on the version of RISKview in
use. These requirements include:
RISKview for Windows
6
•
Pentium PC or faster with a hard disk.
•
Microsoft Windows 98 or higher or Windows NT 4.0 or higher.
•
32 MB installed memory.
Introduction
Installation Instructions
General Installation Instructions
The Setup program copies the RISKview system files into a directory you
specify on your hard disk. Setup and RISKview require Microsoft
Windows to run, so be sure to start Windows before running these
programs.
To run the Setup program in Windows 98 or higher:
1) Insert the RISKview CD-ROM in your CD-ROM drive
2) Click the Start button, click Settings and then click Control Panel
3) Double-click the Add/Remove Programs icon
4) On the Install/Uninstall tab, click the Install button
5) Follow the Setup instructions on the screen
If you encounter problems while installing RISKview, verify that there is
adequate space on the drive to which you’re trying to install. After
you’ve freed up adequate space, try rerunning the installation.
Authorizing
Your Copy of
RISKview
Within 30 days of installing RISKview you need to authorize your copy of
RISKview.
Authorization can be done over the Internet by clicking the Authorize
Now button and following the prompts on the screen. Alternatively, you
can contact Palisade or Palisade Europe during normal business hours
and authorize your copy of RISKview over the phone.
An authorized copy of RISKview is licensed for use on a single computer
only. If you wish to move your copy of RISKview to a different computer,
please contact Palisade for instructions.
Chapter 1: Getting Started
7
Removing
RISKview from
Your Computer
Setup creates the file INSTALL.LOG in your RISKview directory. This file
lists the names and locations of all installed files. If you wish to remove
RISKview from your computer when running Windows 98 or higher or
Windows NT 4 or higher, use the Control Panel’s Add/Remove Programs
utility and select the entry for RISKview.
The DecisionTools Suite
RISKview is a member of the DecisionTools Suite, a set of products for
risk and decision analysis described in Appendix D: Using RISKview
With Other DecisionTools. The default installation procedure of
RISKview puts RISKview in a subdirectory of a main “Program
Files\Palisade” directory. This is quite similar to how Excel is often
installed into a subdirectory of a “Microsoft Office” directory.
One subdirectory of the Program Files\Palisade directory will be the
RISKview directory (by default called RISKVIEW45). This directory
contains the RISKview program file (RISKVIEW.EXE) plus example
models and other files necessary for RISKview to run. Another
subdirectory of Program Files\Palisade is the SYSTEM directory which
contains files which are needed by every program in the DecisionTools
Suite, including common help files and program libraries.
8
Installation Instructions
Setting Up the RISKview Icons or Shortcuts
Creating the
Shortcut in the
Windows
Taskbar
In Windows, setup automatically creates a RISKview command in the
Programs menu of the Taskbar. However, if problems are encountered
during Setup, or if you wish to do this manually another time, follow the
following directions.
1) Click the Start button, and then point to Settings.
2) Click Taskbar, and then click the Start Menu Programs tab.
3) Click Add, and then click Browse.
4) Locate the file RISKVIEW.EXE and double click it.
5) Click Next, and then double-click the menu on which you want the
program to appear.
6) Type the name “RISKview”, and then click Finish.
Chapter 1: Getting Started
9
10
Installation Instructions
Chapter 2: An Overview of
RISKview
Introduction .......................................................................................13
What is a Probability Distribution Function?.................................15
Types of Distribution Functions .........................................................15
Using RISKview ................................................................................17
Starting RISKview .................................................................................17
Distribution Palette ...............................................................................18
Drawing a Curve ....................................................................................20
Creating a Distribution Function ........................................................22
Getting the Best Fitting Distribution .................................................23
Graphs and Statistics for Fitted Distributions..................................24
Using the Results of a Fit......................................................................26
Chapter 2: An Overview of RISKview
11
12
Installation Instructions
Introduction
RISKview is a distribution viewing companion to any Windows program.
It helps you select a probability distribution by previewing different
distributions and parameters before introducing them to your model.
This overview contains two sections. The first, What is a Probability
Distribution Function?, talks about the different types of distribution
functions and how they can be used to describe real-life situations. The
second section, Using RISKview, gives a brief tour of RISKview and its
features. Please refer to the next chapter, The RISKview Reference Guide, if
you need more detailed information on RISKview's commands and
options.
Chapter 2: An Overview of RISKview
13
14
Introduction
What is a Probability Distribution Function?
A probability distribution is a set of probabilities associated with all
possible outcomes of an uncertain event. Each probability distribution
function has measured statistical and probabilistic properties, which
depend directly on the parameters of the function.
Types of Distribution Functions
Discrete vs.
Continuous
Functions
A probability distribution is continuous when any value between the
minimum and maximum is possible (has finite probability). For example,
an uncertainty function describing the possible annual rainfall in Ithaca,
New York next year would be a continuous function since any value
between 0 and some upper limit is possible.
Continuous Density Distribution
A discrete probability distribution has only a finite number of possible
values between the maximum and minimum. For example, an
uncertainty function describing the outcome of a coin toss is discrete since
only two values are possible: heads or tails.
Discrete Density Distribution
RISKview offers both discrete (BINOMIAL GEOMET, etc.) and continuous
(BETA, NORMAL, etc.) functions.
Theoretical vs.
Empirical
Functions
An empirical distribution uses observed data to specify a distribution
directly, while a theoretical distribution uses a pre-defined distribution
formula to represent a large set of data with a small set of parameters.
Most of RISKview's distribution functions are theoretical, but you can
input empirical distributions using functions like GENERAL or CUMUL.
Typically, it is preferable to use a theoretical distribution because it
generates a smooth, consistent data set.
Chapter 2: An Overview of RISKview
15
Finding a
BestFit
An empirical distribution may be "fitted" to a theoretical distribution
using a distribution fitting method. In RISKview, the best theoretical
distribution corresponding to an empirical distribution drawn in the
Distribution Artist can be found.
For each theoretical distribution, RISKview tries to find parameters that
cause the function's statistical properties to match those of the empirical
distribution.
Cumulative
Distributions
Any probability distribution may be expressed in cumulative form. A
cumulative curve is typically scaled from 0 to 1 on the Y-axis, with Y-axis
values representing the cumulative probability up to the corresponding Xaxis value.
Cumulative Probability Distribution
1.0
Cumulative
Probability
0.5
0.0
Minimum
Distribution
Value
x1
Maximum
Distribution
Value
In the cumulative curve above, the 0.5 cumulative value is the point of
50% cumulative probability (0.5 = 50%). Fifty percent of the values in the
distribution fall below this median value and fifty percent are above. The
0.0 cumulative value is the minimum value (0% of the values fall below
this point) and the 1.0 cumulative value is the maximum value (100% of
the values fall below this point).
16
What is a Probability Distribution Function?
Using RISKview
This section gives a brief overview of the features of RISKview. For more
detailed information on each action and command, please refer to The
RISKview Reference Guide in the following chapter.
Starting RISKview
The Setup program creates a Start Menu entry for RISKview in a group
titled Palisade DecisionTools. Selecting this entry starts RISKview.
Chapter 2: An Overview of RISKview
17
Distribution Palette
The main RISKview window displays a graph of any distribution function
with any parameters. To display a new graph, just change the function
shown in the Dist... drop down list or click the Dist… button to display
the Distribution Palette (selecting from the list of available distributions),
or change the values of any of the distribution parameters.
On the right side of the distribution window, statistics for the graphed
distribution are displayed. These values update each time the graph is
changed.
Using Delimiters
18
Delimiters (marked with inverted triangles) allow setting of target
probabilities and x-axis scaling using the mouse. Cumulative
probabilities can be set directly on a distribution graph using the
displayed probability delimiters. Dragging probability delimiters changes
left and right x and p values shown in the probability bar below the
graph and in the statistics grid. Dragging the delimiters at either end of
the x-axis rescales the x-axis.
Using RISKview
Overlaying
Right-clicking in the distribution window and selecting Add Overlay
allows you to switch between specifying a distribution for the primary or
overlay curve. This allows you to compare how two distributions differ
graphically. Moving delimiters across an overlaid distribution graph
displays target probabilities for both the primary and overlay curve in the
statistics to the right of the graph. This allows you to easily compare the
probabilities associated with different target values for the two different
distributions.
Chapter 2: An Overview of RISKview
19
Drawing a Curve
Clicking the Insert Artist Window icon displays a window in which you
can draw your own curve to represent the probabilities of different values
occurring. This "hand-drawn" curve can then be transformed into a
probability distribution that you can use as needed.
To draw in the Distribution Artist window, you can clear the initial "predrawn" curve by clicking the Clear Curve icon (the first icon on the Artist
toolbar) or selecting Clear Curve from the right-click pop-up menu.
Then, enter the minimum and maximum values for your curve. To draw,
simply move the mouse to the point where you wish to start the
distribution and hold down the left mouse button. Drag the mouse to the
right (while keeping the left mouse button down) until you have finished
drawing the curve.
20
Using RISKview
Smoothing a
Curve
Clicking the Smooth Curve icon (the second from the left on the Artist
toolbar) smoothes out the jagged points on the drawn curve. Repeatedly
clicking the Smooth Curve icon smooths a drawn curve more and more.
For example, the drawn curve shown here:
Results in the following graph after smoothing:
Chapter 2: An Overview of RISKview
21
Modifying a
Drawn Curve
After drawing a curve, you may wish to "drag" one of the data points to a
new location. Simply click the left mouse button on the data point and,
while holding down the button, drag the point to a new location. When
you lift the button, the curve is re-drawn automatically to include the new
data point. The Distribution Artist connects the dragged point to its
adjacent point with either a curved or straight line. Check the option you
prefer in the window.
Creating a Distribution Function
Once you are satisfied with the shape of your curve, you can convert it to
a General distribution by clicking the Create Distribution icon (the third
icon on the Artist toolbar) or selecting the Create Distribution command
from the right-click pop-up menu. A General distribution is simply a set
of X-Y points that describe your curve. This curve represents a
probability distribution that can be sampled in @RISK.
22
Using RISKview
Getting the Best Fitting Distribution
Your drawn curve can also be converted to a theoretical function by
clicking the Fit Curve icon (the fourth icon on the Artist toolbar) or
selecting the Fit Curve command from the right-click popup menu. After
fitting, a Fit Results window displays the results of the fitting of your
curve against 27 available probability distribution types.
By clicking on the possible fitted distributions listed, you can see how
each distribution compares with your original curve.
How is Fitting
Performed?
RISKview uses the least squares method to fit your drawn curve to a
theoretical distribution. The best fitting distribution is the one with the
smallest root-mean square error (RMSErr). The RMSErr between set of n
curve points (Xi, Yi) and a theoretical distribution function f(x) with one
parameter α is:
RMSErr =
1 n
∑ (f(x i ,α ) - y i ) 2
n i =1
The value of α that minimizes this value is called the least squares fit. In
a sense, this value minimizes the “distance” between the theoretical curve
and the data. The formula above is easily generalized to more than one
parameter.
This method is used to calculate the best distribution for both density and
cumulative curve data which can be entered in a Distribution Artist
window.
Chapter 2: An Overview of RISKview
23
Graphs and Statistics for Fitted Distributions
RISKview provides two types of graphs to help you visually assess the
quality of your fits.
Comparison
Graphs
24
A comparison graph superimposes the input data and fitted distribution
on the same graph, allowing you to visually compare them either as
density or cumulative curves. This graph allows you to determine if the
fitted distribution matches the input data in specific areas. For example, it
may be important to have a good match around the mean or in the tails.
Using RISKview
Difference
Graphs
A difference graph displays the absolute error between the fitted
distribution and the input data.
Statistics and
Targets
RISKview reports basic statistics (mean, variance, mode, etc.) for each
fitted distribution, which can easily be compared to the same statistics for
the input data.
RISKview allows you to compare percentiles and target values between
distributions and the input data. For example, perhaps the 5th and 95th
percentiles values are important to you. This can be done by moving the
delimiters which allow you to visually set two different targets or
percentiles.
Chapter 2: An Overview of RISKview
25
Using the Results of a Fit
Exporting
Graphs and
Reports
Once you have analyzed the results of your fit, you may wish to export
the results to another program. Of course, you can always copy and paste
any RISKview graph or report into Excel or another Windows application
via the clipboard. In addition, using the Graph In Excel command,
RISKview allows you to create a copy of the current RISKview graph in
Excel’s native chart format. You will need to have Excel running to do
this.
Lognorm 2(3.1320, 0.042152) shift=-23.0695
X <= -1.6841
5.0%
0.45
X <= 0.90000
85.5%
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
-3
26
-2
-1
0
1
2
3
Using RISKview
Chapter 3: RISKview Reference
Guide
Introduction .......................................................................................29
Reference: RISKview Icons .............................................................31
RISKview Toolbar .................................................................................32
Reference: RISKview Commands
35
File Menu ...........................................................................................37
New Command.......................................................................................37
Open Command .....................................................................................37
Save Command, Save As Command ..................................................38
Print Command ......................................................................................38
Exit Command ........................................................................................38
Edit Menu...........................................................................................39
Cut Command.........................................................................................39
Copy Command......................................................................................39
Paste Command ......................................................................................39
Insert Menu........................................................................................41
Artist Window Command ....................................................................41
Distribution Window Command ........................................................42
Graph Menu .......................................................................................45
Graph Format Command ......................................................................45
Type Tab – Graph Format Command.................................................45
Scaling Tab – Graph Format Command.............................................47
Style Tab – Graph Format Command.................................................49
Titles Tab – Format Command ............................................................50
Delimiters Tab – Graph Format Command.......................................51
Graph in Excel Command.....................................................................52
Delimiter Defaults Command .............................................................52
Artist Menu ........................................................................................53
Artist Window ........................................................................................53
Clear Curve Command..........................................................................54
Chapter 3: RISKview Reference Guide
27
Smooth Curve Command .................................................................... 54
Copy Command..................................................................................... 58
Create Distribution Command ........................................................... 55
Fit Curve Command.............................................................................. 56
Window Menu ................................................................................... 59
Cascade Command, Tile Command................................................... 59
List of Available Windows.................................................................. 59
Help Menu ......................................................................................... 61
RISKview Help, Distributions Help ................................................. 61
Online Manual....................................................................................... 61
Authorization Command ..................................................................... 61
About Command ................................................................................... 62
28
Using RISKview
Introduction
This chapter describes the icons, commands, probability distribution
functions and macros used to set up and execute a risk analysis using
RISKview. The RISKview Reference Guide chapter is divided into
two sections:
1) Reference: RISKview Icons
2) Reference: RISKview Commands
Chapter 3: RISKview Reference Guide
29
30
Introduction
Reference: RISKview Icons
RISKview icons are used to quickly and easily perform tasks
necessary to fit probability distributions to data. RISKview icons
appear in the RISKview window. This section briefly describes each
icon, outlining the functions they perform and the menu command
equivalents associated with them.
A second toolbar titled DecisionTools is also available when @RISK for
Excel is installed. This toolbar contains icons which can be used to
run RISKview or any of the other programs in the DecisionTools suite
(if these programs are installed on your system). For more
information on the DecisionTools suite, see Appendix A: Using
RISKview With Other DecisionTools.
Chapter 3: RISKview Reference Guide
31
RISKview Toolbar
The following icons are shown on the RISKview toolbar in the
RISKview Window.
Icon
Function Performed and Command Equivalent
Display current graph as a density graph
Command equivalent: Graph menu Format Graph command
Graph Type - Density option
Display current graph as a cumulative ascending line
graph
Command equivalent: Graph menu Format Graph command
Graph Type – Cumulative Ascending option
Display current graph as a cumulative ascending area
graph
Command equivalent: Graph menu Format Graph command
Graph Type – Cumulative Ascending option
Display graph format options
Command equivalent: Graph menu Format Graph command
Generate current graph as an Excel format graph
Command equivalent: Graph menu Graph in Excel command
Insert Artist Window
Command equivalent: Insert menu Artist Window command
Insert Distribution Window
Command equivalent: Insert menu Distribution Window
command
Clear current curve in Distribution Artist window
Command equivalent: Artist menu Clear Curve command
Smooth current curve in Distribution Artist window
Command equivalent: Artist menu Smooth Curve command
32
Reference: RISKview Icons
Create distribution from current curve in Distribution
Artist window
Command equivalent: Artist menu Create Distribution command
Find best fitting distribution for the current curve in
Distribution Artist window
Command equivalent: Artist menu Fit Curve command
Copy current curve or points from the Distribution Artist
window
Command equivalent: Artist menu Copy command
Chapter 3: RISKview Reference Guide
33
34
Reference: RISKview Icons
Reference: RISKview
Commands
Reference: RISKview Commands
35
36
File Menu
New Command
Opens a new RISKview project.
When the File New command is selected, a blank window is
displayed and all graphs are closed. The Save As dialog box appears
if you haven’t saved the current project.
Open Command
Opens a saved RISKview project
The File Open command opens a previously saved RISKview project
(.RVP file) including all drawn curves and distribution graphs.
Open Icon
Reference: RISKview Commands
37
Save Command, Save As Command
Saves the current RISKview project
The File menu Save and Save As commands save the current
RISKview graphs in a .RVP file.
Save Icon
Print Command
Prints the current graph
The Print command prints the active RISKview graph.
Exit Command
Exits RISKview
The File menu Exit command shuts down RISKview. You will have
an opportunity to save the current RISKview project prior to exiting.
38
File Menu
Edit Menu
Cut Command
Cuts the current selection
The Edit menu Cut command cuts the current selection. This data can
be pasted from the Clipboard to other applications.
Copy Command
Copies RISKview reports and graphs to the Windows Clipboard
The Edit menu Copy command is used to transfer RISKview reports
and graphs to the Clipboard so they can be pasted into your
spreadsheet or word processor. The data to be copied is determined
by the current active window and selection in RISKview. The active
window is the one with its title bar highlighted.
RISKview graphs are copied to the clipboard as Windows metafiles.
When placed in your spreadsheet they may be resized and annotated.
Paste Command
Pastes the current contents of the Clipboard into an RISKview
statistics report
The Edit menu Paste command is used to transfer the Clipboard
contents into the current selection.
Reference: RISKview Commands
39
40
Edit Menu
Insert Menu
Artist Window Command
Inserts an Artist Window in the RISKview window
The Insert menu Artist Window command (or clicking the Insert
Artist Window icon) inserts a artist window in the RISKview
window. An artist window allows a free-form curve to be drawn,
which can then be used to define a probability distribution.
Artist Window
To learn about the commands used to draw curves in the Artist
window, see Artist Menu Commands in this Reference section.
Reference: RISKview Commands
41
Distribution Window Command
Inserts a Distribution Window in the RISKview window
The Insert menu Distribution Window command (or clicking the
Insert Distribution Window icon) inserts a distribution window in the
RISKview window. Distribution windows can be used at any time to
preview a probability distribution or results of fitting drawn curves.
A distribution window displays either a:
1) Graph of a theoretical distribution whose parameters are
entered in the distribution window.
2) Graph of a distribution function generated by a fit of a drawn
curve.
An overlay graph may also be placed on a distribution graph in the
Distribution window. This overlay can come from any of the sources
listed above.
Distribution
Window
42
Insert Menu
Contents of the
Distribution
Window
The different elements of the Distribution Window are as follows:
•
Source. Specifies the source of the distribution to be graphed,
either function, fit results or none.
1) Function specifies that distribution type and arguments are
entered by the user directly in the window.
2) Fit Results specifies that the distribution is from a fit result of
a drawn curve.
3) None removes any entered distribution. None typically is
used to remove an overlay.
When source is set to function, the following items allow the entry of
a distribution type and arguments:
•
Dist. and Arguments. Selects a distribution type from all
available distributions. Depending on the distribution type
selected the displayed arguments will change. For distributions
that take a set with a variable number of p or x,p values, a grid is
displayed that allows entry of those values.
Clicking the Dist… button displays the Distribution Palette with
graphical images of all available probability distribution types.
Clicking on the picture of a distribution selects it.
•
Tr. Min and Max. Sets the minimum and maximum truncation
limit for the entered distribution. When truncation values are
entered, no values outside the truncation limits will have any
probability of occurring.
Delimiters and Statistics are used to display underlying statistics on
displayed distribution graphs:
•
Delimiters (marked with inverted triangles). Allows setting of
target probabilities and x-axis scaling using the mouse.
Cumulative probabilities can be set directly on a distribution
graph using the displayed probability delimiters. Dragging
probability delimiters changes left and right x and p values
shown in the probability bar below the graph and in the statistics
grid. Dragging the delimiters at either end of the x-axis rescales
the x-axis.
•
Statistics. Displays the statistics for the graphed distributions,
including any overlays. In addition, x and p values set using the
delimiters in the statistics grid to the right of the distribution
graph are also shown.
Reference: RISKview Commands
43
Icons in the
Define
Distribution
Window
Alternate
Parameters
The following icons are available in the Define Distribution Window
(as displayed left to right in the window):
•
Primary/Overlay Switch. Switches the displayed graph and
distribution information from the primary curve to the overlay
curve.
•
Alternate Parameters. Allows the selection of percentile
parameters as arguments to the selected distribution.
•
Graph Formatting. Displays the Graph Format dialog for
changing type, scaling, style and titles for the displayed graph.
Alternate Parameters allow you to specify values for specific
percentile locations of an input distribution as opposed to the
traditional arguments used by the distribution. The percentiles to be
entered are specified in the Alternate Distribution Parameters dialog,
displayed by clicking the ALT icon. Depending on the type of
distribution being entered, the contents of the Alternate Distribution
Parameters dialog will change.
Percentile parameters may be mixed with standard parameters by
clicking the appropriate radio buttons. By selecting Save as Default,
a set of percentile arguments may be set as the default for a given
distribution type, so that every lognormal distribution, for example,
will be entered in the Distribution window using a 10th and 90th
percentile value.
Selecting Descending Percentiles specifies that the percentiles used
for alternate parameters will be in terms of cumulative descending
probabilities. Percentiles entered in this case specify the probability of
a value greater than the entered argument x-value.
44
Insert Menu
Graph Menu
Graph Format Command
Changes the type or appearance of the current graph
The Graph menu Format command changes the appearance of the
selected graph. Use this command to change the type, scaling, style
and titles of your graphs and turn delimiters on and off.
Save as Default
Clicking Save as Default sets the current format settings as the
default. All new graphs generated will use these defaults.
Type Tab – Graph Format Command
Changes the type and format of a displayed graph
Type Tab on
Graph Format
Dialog Box
The Type tab on the Graph Settings dialog box allows you to change
the type of a displayed graph.
•
Display As. Displays a graph in density, cumulative ascending
or cumulative descending format. Auto specifies that the type of
graph displayed will be based on the type of input data entered.
In this case, graphs will be displayed in density format except
when the input data type is cumulative.
Reference: RISKview Commands
45
•
#Bins. Sets the number of histogram intervals calculated across
the range of a graph. The value entered must be in the range 1 to
200. The setting Auto calculates the best number of bins to use for
your data according to Sturges' Rule, where k, the number of bins
is found by:

k = 1 + log 2 n
46

•
Minimum. Sets the minimum value where histogram bins start.
Auto specifies that BestFit will start the histogram bins based on
the minimum of the data graphed.
•
Maximum. Sets the maximum value where histogram bins end.
Auto specifies that BestFit will end the histogram bins based on
the maximum of the data graphed.
Graph Menu
Scaling Tab – Graph Format Command
Changes the scaling, units and axis tick marks on the active
graph
The available Scaling options allow you to rescale the current graph,
set the number of X and Y axis ticks, set the scale factor with which
values are displayed and display gridlines on the graph. You can also
select to have RISKview automatically scale the X and Y axis of a
graph.
Note: X-axis scaling can also be changed by dragging the delimiters
at the X-axis endpoints using the mouse directly on the graph.
Scaling Tab on
Graph Format
Dialog Box
•
Automatically Scale. Specifies that RISKview will automatically
calculate X or Y axis minimum and maximum values based on the
range and probabilities of the data displayed in the graph.
Note: Clicking the AutoScale button in the top right corner of a graph
selects the Automatically Scale option and rescales the graph.
•
X-Axis Maximum. Enters the X-axis maximum value for the
current graph. This specifies the maximum value shown on the
horizontal X-axis of the displayed graph. Values are entered in
terms of actual values with all digits. Using the current scale
factor, RISKview converts those values to the appropriate units
(in thousands, in millions, etc.) for display. X-axis scaling may be
adjusted to include all of a distribution or just a portion of it. This
allows you to view only a piece of a distribution when more detail
is desired.
Reference: RISKview Commands
47
•
X-Axis Minimum. Enters the X-axis minimum value for the
current graph. Information given for the X-maximum option also
applies to X-minimum.
•
Y-Axis Maximum. Enters the Y-axis maximum value for the
current graph. This specifies the maximum probability value
displayed on the Y-axis.
•
Y-Axis Minimum. Enters the Y-axis minimum value for the
current graph.
•
# of Ticks. Defines the number of ticks drawn on the X-axis or Yaxis between the origin and the extreme values.
•
Scale Factor. Sets the factor used in displaying units on the Xand Y-axis in RISKview graphs. Factors are entered as the listed
unit names (thousands, millions, etc.) or as powers of 10.
•
Show Scale Factor Label. Specifies that the scale factor will be
labeled on the X and Y axes.
•
Show Grid Lines. Specifies if Y or X-axis grid lines are to be
displayed.
When RISKview initially scales a graph it calculates a default scale
factor based on the magnitude of the values displayed in the graph.
Entering a new scale factor causes the units displayed (i.e., in
thousands, in millions, etc.) to change.
48
Graph Menu
Style Tab – Graph Format Command
Changes the color, format and pattern of elements in the
displayed graph
The Style tab in the Graph Format dialog box changes the colors,
format and patterns on a displayed graph.
Style Tab in
Graph Format
Dialog Box
Foreground and
Background
Color
The Foreground and Background Color options set the color of the
foreground and background elements in the displayed graph. Colors
can be selected by clicking on the box to the right of the Color entry.
Curve Style
The Curve Style options change the color, format, pattern and other
options of the current graph and its overlays. The Format, Pattern
and Options available change with the type of the graph displayed.
The Format settings include:
•
Points Format. Graphs unconnected points at each point on the
density or cumulative curve.
•
Line Format. Graphs cumulative line graph or density curve line
graph.
•
Bars Format. Graphs standard histogram bars.
•
Solid Format. Graphs all curves with the area under the curve
filled.
Pattern options include a variety of available line, point and fill
patterns.
When an overlay is present, the Overlay entry displays the color,
format, pattern and options for the overlay graph.
Reference: RISKview Commands
49
Titles Tab – Format Command
Allows the entry of custom titles for a graph
The Titles tab allows the entry of a custom title for the top of any
graph, along with custom X- and Y-axis titles. Font style may also be
set for titles.
Titles Tab in
Graph Format
Dialog Box
•
Main Graph and Axis Titles. Changes a selected title. Titles may
also be formatted using any of the font styles listed in the
dropdown font style entries.
•
Display. Adds or removes the RISKview-generated labels on
graphs - Legend (graphs with overlays only) and Expected Value.
Text and graphics may also be placed on graphs using the drawing
and text editing capabilities of your spreadsheet. Using the RISKview
Edit menu Copy command, the active graph can be transferred to the
Clipboard where it can be pasted into your spreadsheet as a Windows
Metafile. Once pasted, the graph can be resized and text and graphics
may be attached to it.
50
Graph Menu
Delimiters Tab – Graph Format Command
Selects the display mode for delimiters on a histogram graph or
cumulative graph
Delimiters can be displayed on any graphs to allow 1) the setting of
target probabilities directly on the graph and 2) X-axis rescaling.
Delimiters are marked by inverted triangles at the top of a graph.
Delimiters can be turned on and off as desired and shading between
delimiters can be displayed or removed. The color of delimiters and
their associated shading can be specified by clicking on the box to the
right of the Delimiter Color entry.
Using Delimiters
To move delimiters:
1) Click and drag any of the four delimiters marked by an upsidedown triangle at the top of the graph to the desired location.
When a comparison graph is displayed, moving probability
delimiters also updates the Left X, Left P, Right X, Right P,
X(diff) and P(diff) in the displayed Statistics tab. The diff
statistics show the value and probabilities falling between the left
and right probability delimiters. On a difference graph,
delimiters update the X,Y and difference entries in displayed
Statistics tab. For P-P and Q-Q graphs, moving the single
delimiter updates the Delimiter entry in the displayed Statistics
tab.
Reference: RISKview Commands
51
Graph in Excel Command
Draws the selected graph in Microsoft Excel in the spreadsheet's
native format
The Graph menu Graph in Excel command places the selected graph
data points in an Excel worksheet. Then, a native format graph is
created on the worksheet from the data points.
Once the graph is created, it can be customized and rescaled using
Excel's editing features. Please consult your spreadsheet's
documentation for more information on editing the graphs.
For histograms, bar heights can be changed directly in Excel by
changing the relevant series data.
Delimiter Defaults Command
Specifies the position of the left and right delimiters for all
distribution graphs
The Graph menu Delimiter Defaults command specifies the starting
delimiter positions for new distribution graphs. These settings affect
all new distribution graphs.
52
Graph Menu
Artist Menu
The Artist window is used to draw freeform curves that can be used
to create probability distributions. The commands on the Artist menu
control both how drawing is performed in the Artist window and
how a probability distribution is created from a drawn curve. The
Artist menu is only available when an Artist window is the active
window.
Artist Window
Drawing in the
Artist Window
After an Artist window has been inserted using the Insert menu
Artist Window command, a curve may be drawn simply by dragging
the mouse through the window. The following entries in the Artist
window control the scaling and type of graph that is drawn:
•
X Min and X Max. Specifies the X-axis scaling for the drawn
graph.
•
# Markers. Sets the number of markers that will be drawn as you
drag across the min-max range of the graph. Markers allow you
to drag the points on the curve to change its shape.
•
Curve Type. Specifies the type of curve that will be created,
where Density is a probability density curve, Cumulative Asc. is
an ascending cumulative curve and Cumulative Des. is a
descending cumulative curve.
•
Marker Drag Style. Specifies whether markers will be connected
with straight lines or curves when they are moved.
Reference: RISKview Commands
53
If you are drawing an ascending cumulative distribution (as specified
in the Curve Type option), you will only be able to draw a curve with
ascending Y values, and vice-versa for a descending cumulative
curve.
When you have completed a curve, the end-points on your curve will
be automatically plotted.
After drawing a curve, you may want to "drag" one of the markers to
a new location. Simply click the left mouse button on the marker and,
while holding down the button, drag the point to a new location.
When you lift the button, the curve is redrawn automatically to
include the new data point.
You can only move data points along the Y-axis, and you cannot drag
points outside the axes. You cannot modify the positions of the end
points.
Clear Curve Command
Erases the curve in the active Artist window
The Artist menu Clear Curve command erases the curve in the active
Artist window.
Smooth Curve Command
Smoothes the curve in the active Artist window
The Artist menu Smooth Curve command smoothes the curve in the
active Artist window. Repeated selection of the Smooth Curve
command makes a progressively smoother (and flatter) curve.
54
Artist Menu
Create Distribution Command
Creates a General distribution from the drawn curve
The Artist menu Create Distribution command creates a General
distribution from a drawn curve. A General distribution is a userdefined RISKview distribution that takes a minimum value, a
maximum value and a set of X,P data points which define the
distribution.
General
Distribution
from a Curve in
an Artist
Window
When the Artist menu Create Distribution command is selected, the
General distribution created from a curve in an Artist window is
displayed in a Distribution window.
Reference: RISKview Commands
55
Fit Curve Command
Fits a drawn curve to a probability distribution
The Artist menu Fit Curve command fits a probability distribution to
a drawn curve. The results of the fit are displayed in a Fit Result
window where each of the fitted distributions can be reviewed.
Fitted
Distribution
from a Curve in
an Artist
Window
Fit Results
Window
56
When you fit a curve in a Distribution Artist window, a new Fit
Result window is automatically created for you if one does not exist.
Artist Menu
The contents of the Fit Results window are as follows:
Fitted
Distributions
List
The Fitted Distributions list displays all distributions for which valid
fit results were generated. Clicking on a distribution listed in the
Fitted Distributions list displays the fit results for that distribution,
including graphs and statistics on the selected fit.
If a fit did not return valid results for a distribution type, that
distribution is not listed in the Fitted Distributions list. The number
of invalid fits is shown beneath the list.
Rank By
The Rank By entry ranks the distributions according to the RMS
Error, or root mean squared error test, or Name, which simply lists fit
results alphabetically. For more information on the RMS Error test,
see Chapter 2: An Overview of RISKview.
Fit Result
Graphs
For fit results in RISKview, Comparison and Difference graphs can
be displayed.
For all graph types delimiters may be used to graphically set specific
X-P values on the graph. X-axis minimum and maximum values may
also be set by dragging the X-axis endpoint delimiters. Delimiters are
marked by the inverted triangles above the graph.
Comparison
Graph
A
Comparison Graph displays two curves - the input distribution and
the distribution created by the best fit analysis.
Two delimiters are available for a Comparison graph. These
delimiters set the Left X and Left P values, along with the Right X
and Right P values. Values returned by the delimiters are displayed
in both the probability bar under the graph and in the statistics grid to
the right of the graph.
Reference: RISKview Commands
57
Difference
Graph
A Difference graph displays curve - the difference between the input
distribution and the distribution created by the best fit analysis.
A single delimiter can be used on the Difference graph to return
specific X-Y values along with the difference between the input data
and the fitted distribution at any X-value on the graph.
Copy Command
Copies data from the active Artist window to the clipboard
The Artist menu Copy command copies the selected data or the graph
from the Artist window to the Clipboard. All Points copies all X and
Y data points which define the drawn curve, including those
calculated on lines connecting markers. Marked Points copies X and
Y data points for markers only. Graph places a copy of the drawn
graph in the clipboard.
58
Artist Menu
Window Menu
Cascade Command, Tile Command
Arranges open windows and graphs in the RISKview Window
The Window menu Cascade and Tile commands cascade or tile the
open windows neatly within the RISKview window.
List of Available Windows
Lists all open windows in the RISKview window
The bottom items in the Window menu list all open windows in the
current tab in the RISKview window (the active window is noted with
a check mark). To activate a window, select its name from the list.
Reference: RISKview Commands
59
60
Window Menu
Help Menu
RISKview Help, Distributions Help
Opens on-line help files for RISKview
The Help menu RISKview Help command opens the main help file
for RISKview. All of RISKview's features and commands are
described in this file.
The Help menu Distributions Help command opens the distribution
help document for RISKview in .PDF format. Information on all of
RISKview's distribution functions, including formulas, statistics and
graphs, is included in this file.
Online Manual
Opens on-line manual for RISKview
The Help menu Online Manual command opens this manual on-line
in PDF format. You must have Adobe Acrobat reader installed to
view the online manual.
Authorization Command
Displays authorization information for RISKview and allows the
authorization of trial versions
The Help menu Authorization command displays the Authorization
dialog box, listing the version and authorization information for your
copy of RISKview. Using this dialog box you can also convert a trial
version of RISKview into an authorized copy.
Reference: RISKview Commands
61
About Command
Displays version and copyright information about RISKview
The Help menu About command displays the About dialog box,
listing the version and copyright information for your copy of
RISKview
62
Help Menu
Appendix A: Using RISKview
With Other DecisionTools™
Palisade’s DecisionTools Suite is a complete set of decision analysis
solutions for Microsoft Windows. With the introduction of
DecisionTools, Palisade brings you a decision-making suite whose
components combine to take full advantage of the power of your
spreadsheet software.
The DecisionTools Suite
The DecisionTools Suite focuses on providing advanced tools for any
decision, from risk analysis to sensitivity analysis to distribution
fitting. Software packaged with the DecisionTools Suite includes:
•
@RISK — risk analysis using Monte-Carlo simulation
•
TopRank — sensitivity analysis
•
BestFit — distribution fitting
•
PrecisionTree — decision analysis with decision trees and influence
diagrams
•
RISKview — distribution viewing companion
Note: When you purchase the DecisionTools Suite, all the features of
BestFit and RISKview come fully integrated into your copy of @RISK
Professional that comes with the Suite.
While all the tools listed above can be purchased and used separately,
they become more powerful when used together. Analyze historical
and fit data for use in an @RISK model. Or use TopRank to determine
which variables to define in your @RISK model.
This chapter explains many of the ways the components of the
DecisionTools suite interact and how they will make your decision
making easier and more effective.
Appendix A: Using RISKview With Other DecisionTools™
63
Note: Palisade also offers a version of @RISK for Microsoft Project.
@RISK for Project allows you to run risk analyses on project
schedules created in Microsoft Project, the leading software package
for project management. Contact Palisade for more information on
this exciting implementation of @RISK!
Purchasing Information
All of the software mentioned here, including the DecisionTools Suite,
can be purchased directly from Palisade Corporation. To place an
order or receive more information, please contact the technical sales
department at Palisade Corporation using one of the following
methods:
•
Telephone us at (800) 432-7475 (U.S. only) or (607) 277-8000 any
weekday from 8:30 AM to 5:30 PM, EST
•
Fax us at (607) 277-8001
•
E-mail us at [email protected]
•
Visit us on the World Wide Web at http://www.palisade.com
•
Mail us a letter at
Technical Sales
Palisade Corporation
31 Decker Road
Newfield, NY 14867
If you want to contact Palisade Europe:
•
Telephone us at +44 (0) 1752 204310 (UK)
•
Fax us at +44 (0) 1752 894833 (UK)
•
E-mail us at [email protected]
•
Visit us on the World Wide Web at http://www.palisadeeurope.com
•
Mail us a letter at
Palisade Europe
The Blue House, Unit 1
30 Calvin Street
London E1 6NW UK
64
The DecisionTools Suite
Palisade’s DecisionTools Case Study
The Excelsior Electronics company currently makes desktop
computers. They are working on a laptop computer, the Excelsior
5000, and want to know whether or not the company will profit from
this venture. They built a spreadsheet model which spans the next
two years, each column representing one month. The model takes
into account production costs, marketing, shipping, price per unit,
units sold, etc. The bottom line for each month is "Profit". Excelsior
expects some initial setbacks on this venture, but as long as they are
not too great and profits are up towards the end of two years, they
will go ahead with the E5000.
Run TopRank First, Then @RISK
TopRank is used on the model to find the critical variables. The
"Profit" cells are selected as outputs, and an automatic What-if
analysis is run. The results quickly show there are five variables (out
of many more) that have the most impact on profits: price per unit,
marketing costs, build time, price of memory, and price of CPU chips.
Excelsior decides to concentrate on these variables.
TopRank
Identifies Key
Factors for New
Computer
Project
Appendix A: Using RISKview With Other DecisionTools™
65
Next, Assess Probabilities
Distribution functions are needed to replace the five variables in the
spreadsheet model. Normal distributions are used for price per unit
and build time, based on internal decisions and information from
Excelsior’s manufacturing division. At a marketing department
meeting, @RISK’s Artist Window is used by managers to draw
distribution curves which represent the range of possible marketing
costs. Once a hand-drawn distribution is agreed upon, the Fit Curve
command provides an @RISK distribution function for use in the
model.
Add Distribution Fitting
Research is done to get weekly price quotes for memory and CPU’s
over the past two years. This data is fed into @RISK’s distribution
fitting and distributions are fitted to the data. Confidence level
information confirms that the distributions are good fits, and the
resulting @RISK distribution functions are pasted into the model.
Fit Historical
Data to
Distributions
66
Palisade’s DecisionTools Case Study
Simulate with @RISK
Once all the @RISK functions are in place, the "Profit" cells are
selected as outputs and a simulation is run. Overall, the results look
promising. Although there will be losses initially, there is an 85%
chance they will make an acceptable profit, and a 25% chance the
venture will generate more revenue than they had initially assumed!
The Excelsior 5000 project is given the go-ahead.
@RISK
Simulates Profit
From Laptop
Sales
Decide with PrecisionTree
Excelsior Electronics had assumed they would sell and distribute the
Excelsior 5000 themselves. However they could use various catalogs
and computer warehouses to distribute their product. A decision tree
model is built using PrecisionTree, taking into account unit prices,
sales volume, and other critical factors for direct sales versus catalog
sales. A Decision Analysis is run and PrecisionTree suggests using
catalogs and warehouses. Excelsior Electronics puts that plan into full
motion.
Appendix A: Using RISKview With Other DecisionTools™
67
.
68
Palisade’s DecisionTools Case Study
Appendix B: Glossary
Definition of Key Terms
Continuous
Distribution
A probability distribution where any value between the minimum
and maximum is possible (has finite probability).
See discrete distribution
Cumulative
Distribution
A cumulative distribution, or a cumulative distribution function, is
the set of points, each of which equals the integral of a probability
distribution starting at the minimum value and ending at the
associated value of the random variable.
See cumulative frequency distribution, probability distribution
Cumulative
Frequency
Distribution
A cumulative distribution is constructed by cumulating the frequency
(progressively adding bar heights) across the range of a frequency
distribution. A cumulative distribution can be an "upwardly sloping"
curve, where the distribution describes the probability of a value less
than or equal to any variable value. Alternatively, the cumulative
curve may be a "downwardly sloping" curve, where the distribution
describes the probability of a value greater than or equal to any
variable value.
See cumulative distribution
Discrete
Distribution
A probability distribution where only a finite number of discrete
values are possible between the minimum and maximum.
See continuous distribution
Event
The term event refers to an outcome or group of outcomes that might
result from a given action. For example, if the action is the pitch of a
baseball, the possible events might include a hit (with outcomes
single, double, triple, home run), an out, a foul ball, a ball, etc.
Expected Value
See mean
Frequency
Distribution
A frequency distribution is constructed from data by arranging values
into classes and representing the frequency of occurrence in any class
by the height of the bar. The frequency of occurrence corresponds to
probability.
Appendix B: Glossary
69
Higher Moments
Higher moments are statistics of a probability distribution. The term
generally refers to the skewness and kurtosis, the third and fourth
moments, respectively. The first and second moments are the mean
and the standard deviation, respectively.
See skewness, kurtosis, mean, standard deviation
Kurtosis
Kurtosis is a measure of the shape of a distribution. Kurtosis
indicates how flat or peaked the distribution is. The higher the
kurtosis value, the more peaked the distribution.
See skewness
Mean
The mean of a set of values is the sum of all the values in the set
divided by the total number of values in the set.
Synonym: expected value
Most Likely
Value
The most likely value or mode is the value that occurs most often in a
set of values. In a histogram and a result distribution, it is the center
value in the class or bar with the highest probability.
Percentile
A percentile is an increment of the values in a data set. Percentiles
divide the data into 100 equal parts, each containing one percent of
the total values. The 60th percentile, for example, is the value in the
data set for which 60% of the values are below it and 40% are above.
Probability
Probability is a measure of how likely a value or event is to occur. It
can be measured from simulation data as frequency by calculating the
number of occurrences of the value or event divided by the total
number of occurrences. This calculation returns a value between 0
and 1 which then can be converted to percentage by multiplying by
100.
See frequency distribution, probability distribution
Probability
Distribution
A probability distribution or probability density function is the
proper statistical term for a frequency distribution constructed from
an infinitely large set of values where the class size is infinitesimally
small.
See frequency distribution
Range
The range is the absolute difference between the maximum and
minimum values in a set of values. The range is the simplest measure
of the dispersion or "risk" of a distribution.
@RISK
@RISK (pronounced "at risk") is the name of the Excel Add-In for Risk
Analysis described in this User’s Guide.
Risk
The term risk refers to uncertainty or variability in the outcome of
some event or decision. In many cases the range of possible outcomes
can include some that are perceived as a loss or undesirable along
with others that are perceived as a gain or desirable. The range of
outcomes is often associated with levels of probability of occurrence.
70
Palisade’s DecisionTools Case Study
Simulation
Simulation is a technique whereby a model, such as an Excel
worksheet, is calculated many times with different input values with
the intent of getting a complete representation of all possible scenarios
that might occur in an uncertain situation.
Skewness
Skewness is a measure of the shape of a distribution. Skewness
indicates the degree of asymmetry in a distribution. Skewed
distributions have more values to one side of the peak or most likely
value — one tail is much longer than the other. A skewness of 0
indicates a symmetric distribution, while a negative skewness means
the distribution is skewed to the left. Positive skewness indicates a
skew to the right.
See kurtosis
Standard
Deviation
The standard deviation is a measure of how widely dispersed the
values are in a distribution. Equals the square root of the variance.
See variance
Stochastic
Stochastic is a synonym for uncertain, risky.
See risk, deterministic
Subjective Risk
Subjective risk or subjective probability is a probability value or
distribution determined by an individual's best estimate based on
personal knowledge, expertise, and experience. New information
often causes changes in such estimates. Reasonable individuals may
disagree on such estimates.
See objective risk
Truncation
Truncation is the process by which a user chooses a minimummaximum range for a random variable that differs from the range
indicated by the distribution type of the variable. A truncated
distribution has a smaller range than the untruncated distribution
because the truncation minimum is greater than the distribution
minimum and/or the truncation maximum is less than the
distribution maximum.
Uncertainty
See risk
Variable
A variable is a basic model component that can take on more than one
value. If the value that actually will occur is not known with
certainty, the variable is considered uncertain. A variable, certain or
uncertain, may be either dependent or independent.
See dependent variable, independent variable
Appendix B: Glossary
71
Variance
72
The variance is a measure of how widely dispersed the values are in a
distribution, and thus is an indication of the "risk" of the distribution.
It is calculated as the average of the squared deviations about the
mean. The variance gives disproportionate weight to "outliers",
values that are far away from the mean. The variance is the square of
the standard deviation.
Palisade’s DecisionTools Case Study
Appendix C: Recommended
Readings
The RISKview User’s Guide has given you a start on understanding
probability distributions. If you're interested in finding out more
about distributions and the theory behind them, here are some books
and articles which examine various areas of interest concerning
probability distributions.
Distribution Fitting
If you’re interested in finding out more about distribution fitting,
consult any of these books:
* Groebner, David F. and Shannon, Patrick W. Business Statistics: A
Decision-Making Approach, 4th ed.: Macmillan Publishing Company,
New York, NY, 1993.
* Law, Averill M. and Kelton, David. Simulation Modeling and Analysis, 3rd
ed.: McGraw-Hill, New York, NY, 1991.
* Walpole, Ronald E. and Myers, Raymond H. Probability and Statistics for
Engineers and Scientists, 5th ed.: Macmillan Publishing Company, New
York, NY, 1993.
Distribution Functions
To learn more about the distribution functions used by RISKview,
refer to the following book:
* Evans, Merran, Nicholas Hastings and Brian Peacock. Statistical
Distributions, 3rd ed: John Wiley & Sons, Inc, New York, NY, 1993.
* These titles can be purchased through Palisade Corporation.
Call
(800-432-7475 or 607-277-8000), fax (607-277-8001), or write to order
or request further information on these and other titles relevant to
risk analysis. The Palisade Technical Sales Department can also be
reached by e-mail at [email protected] or on the World Wide Web
at http://www.palisade.com.
Index
73
74
Index
Index
@
@RISK ................................................................................................... 63, 65
A
About Command........................................................................................... 62
Alternate Parameters.................................................See Parameters, Alternate
Artist Window Command............................................................................. 41
Authorization ............................................................................................ 7, 61
Authorization Command .............................................................................. 61
B
BestFit .................................................................................................... 63, 66
C
Cascade Command ....................................................................................... 59
Clear Curve Command ................................................................................. 54
Copy Command...................................................................................... 39, 54
Create Distribution Command ...................................................................... 55
Cut Command............................................................................................... 39
D
DecisionTools Suite.................................................................................. 8, 63
Delimiter Defaults Command....................................................................... 52
Delimiters .....................................................................See Graphs, Delimiters
Distribution Window Command................................................................... 42
Distributions ................................................................................................. 15
Continuous................................................................................................ 15
Creating .................................................................................................... 22
Creating from Artist Curve ....................................................................... 55
Cumulative ............................................................................................... 16
Index
75
Discrete ..................................................................................................... 15
Drawing ........................................................................................ 20, 41, 53
Empirical .................................................................................................. 15
Fitting........................................................................................................ 23
Fitting from Artist Curve .......................................................................... 56
Truncating................................................................................................. 43
E
Excel Graphs............................................................See Graphs, Excel Format
Exit Command .............................................................................................. 38
F
Fit Curve Command ..................................................................................... 56
Fitting...................................................................................................... 23, 56
G
Glossary of Terms......................................................................................... 69
Graph Format Command .............................................................................. 45
Graph in Excel Command............................................................................. 52
Graphs
Comparison Graph.............................................................................. 24, 57
Copying .................................................................................................... 39
Delimiters ..................................................................................... 18, 51, 52
Difference Graph ................................................................................ 25, 58
Excel Format....................................................................................... 26, 52
Formatting................................................................................................. 45
Histograms................................................................................................ 46
Overlays.............................................................................................. 19, 44
Scaling Axes ............................................................................................. 47
H
Histograms...................................................................................... See Graphs
I
Icons
Desktop ....................................................................................................... 9
RISKview ........................................................................................... 31–34
INSTALL.LOG File ....................................................................................... 3
Installation Instructions............................................................................... 7–9
76
Index
M
Menus
Artist Menu............................................................................................... 53
Edit Menu ................................................................................................. 39
File Menu.................................................................................................. 37
Graph Menu.............................................................................................. 45
Help Menu ................................................................................................ 61
Insert Menu............................................................................................... 41
N
New Command ............................................................................................. 37
O
Online Manual .............................................................................................. 61
Open Command............................................................................................ 37
Overlays.......................................................................... See Graphs, Overlays
P
Palisade Corporation, Contact Information for......................................... 5, 64
Parameters, Alternate.................................................................................... 44
Paste Command ............................................................................................ 39
Percentiles
Calculating Targets................................................................................... 25
Cumulative Descending............................................................................ 44
PrecisionTree.......................................................................................... 63, 67
Print Command............................................................................................. 38
Project, RISKview ........................................................................................ 37
R
Recommended Readings .............................................................................. 73
Reports
Copying .................................................................................................... 39
Exporting .................................................................................................. 26
RVP File ................................................................................................. 37, 38
S
Save As Command ....................................................................................... 38
Save Command............................................................................................. 38
Smooth Curve Command ............................................................................. 54
Index
77
Smoothing............................................................................................... 21, 54
Statistics........................................................................................................ 25
System Requirements ..................................................................................... 6
T
Targets ...................................................................................... See Percentiles
Technical Support....................................................................................... 4–6
Tile Command .............................................................................................. 59
Toolbars ........................................................................................................ 32
TopRank ................................................................................................. 63, 65
Truncation..................................................................................................... 43
U
Uninstalling RISKview................................................................................... 8
W
Windows
Arranging.................................................................................................. 59
Artist Window .............................................................................. 20, 41, 53
Distribution Window ................................................................................ 42
List of Available ....................................................................................... 59
78
Index
Index
79
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