Risk Event Calculation

See also: ModelRisk functions and windows, Introduction to risk analysis

Introduction

A risk event represents the situation where you have a risk that only occurs with a certain probability and where the risk itself is represented by a specified distribution (the so called 'Impact distribution').

If P is the specified probability of impact, this will also be the area under the (rescaled) impact distribution's PDF, while the remaining 1-P is the probability assigned to an outcome of zero (i.e. the risk event not occurring).

To see the output functions of this window, click here.

Window elements

The Probability field can either be filled in manually or can be selected from a cell in your excel sheet. It should have a value on [0,1].

The 'Impact' distribution Object can also be filled in manually and picked from your sheet and can also be selected from the 'Select Distribution' window.

The graph of the VoseRiskEvent function consists of two parts:

The part in green (by default) represents the probability of not having the risk and thus has a probability mass of 1-'Probability'.

The part in blue (by default) represents the impact one has when the risk actually occurs.

Different types of output can be specified by selecting the appropriate option under the preview graph:

  • Object - to insert the constructed distribution as a distribution Object in the spreadsheet.

  • Simulation - (default) to generate random values from the constructed distribution.

  • f(x) and F(x) - to calculate the probability density function and the cumulative distribution function of some x value(s) (an extra parameter x values will appear on the left side of the window).

  • F-1(U) - to calculate the inverse cumulative when a U-value is entered.

For explanations about other fields, buttons, graphs and summary statistics tables in this window, see Common elements of ModelRisk windows.

Useful tips and tricks

See also: Graphics, workflow and error handling in ModelRisk

Using View Function to return to a window

The output of ModelRisk windows always corresponds to VoseFunctions (the functions ModelRisk adds to Excel) being entered into one or more spreadsheet cells.

You can always re-open the window for a ModelRisk function that is in a spreadsheet cell by using View Function. Select the spreadsheet cell and then select View Function from the ModelRisk menu/toolbar/ribbon.

 

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