Distribution Name: Normal
Parameters:
- UB (Upper bound)
- LB (Lower bound)
Note that LB and UB in the Excel formula below represent a 90% CI. There is a 5% chance of being above the UB and a 5% chance of being below the LB.
A normal (or Gaussian) distribution is a bell-shaped curve that is symmetrically distributed about the mean.
- Many natural phenomena follow this distribution but in some applications it will underestimate the probability of extreme events.
- Empirical rule: Nearly all data points (99.7%) will lie within three standard deviations of the mean.
- When to Use: When there is equal probability of observing a result above or below the mean.
- Examples: Test scores, travel time.
- Excel Formula: =norminv(rand(),(UB + LB)/2,(UB-LB)/3.29)
- Mean: =((UB + LB)/2)