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Expressing Uncertainty

Analytica makes it easy to model and analyze uncertainties even if you have minimal background in probability and statistics. The graphs below review several key concepts from probability and statistics to help you understand the probabilistic modeling facilities in Analytica. This chapter assumes that you have encountered most of these concepts before, but possibly in the distant past. If you need more information, see “Glossary” on page 447 or refer to an introductory text on probability and statistics.

Choosing an appropriate application

With Analytica, you can express uncertainty about any variable by using a probability distribution. You can base the distribution on available relevant data, on the judgment of a knowledgeable individual, or on some combination of data and judgment.

Answer the following questions about the uncertain quantity to select the most appropriate kind of distribution:

• Is it discrete or continuous?
• If continuous, is it bounded?
• Does it have one mode or more than one?
• Is it symmetric or skewed?
• Should you use a standard or a custom distribution?