Random Variables

 Probability Tour
 Random Variables

 The Random Variables add-in (ran_var.xla) performs computations associated with probability distributions. When it is installed, the OR_MM menu includes the menu items shown at the left. Add Random Variable: With this command a dialog is presented with sixteen named distributions, a discrete user distribution and a general distribution. The add-in creates a form holding distribution parameters. All the other programs of the add-in use random variables defined in this way. Plot Random Variable:Up to three distributions may be plotted using Excel graphics. Simulate Random Variable: The add-in uses the Monte Carlo method to simulate a function of one or more random variables. The simulation reports sample moments and a histogram of the simulated data. Functions: The Function command creates a form that defines several random variables and several functions of the random variables. Moments: This command is applicable to function forms created by the Functions command. It uses either enumeration of the sample space or simulation to determine the mean and variance of the functions. Relink Functions: This command is necessary when opening a worksheet that contains user-defined functions that were created on a different computer. The add-in searches through all formula cells on the worksheet and whenever a user-defined function is found, it is rewritten. This works well if the function appears alone in a cell or is the first term after the equal sign. When functions appear deeper in an equation, the equation will be modified erroneously. To guard against this result, place all user-defined functions as the first term in an equation.

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by Paul A. Jensen