Part 2. MM4XL Tools > 1. Strategic Tools > Risk Analyst > 4. Functions > 3. Distribution Functions > mmBETA(Scale, Shape)

mmBETA(Scale, Shape)

=mmBETA(2, 4) can equal 0.304847002

Application

This function is used to determine the probability of an event, given a number of trials and successful events. This distribution is mainly used for inference purposes, that is, when the data from a sample is used to project the data for the whole population. It is often used in the absence of data. See also mmBETAGEN.

How to use

It returns the probability of an event occurring. This helps, for instance, when we need to estimate the probability that the next client will buy. For instance, if for every 100 calls 15 would buy, we could use the formula below to estimate the probability of the next purchase occurring:
=mmBETA(15, 86)

The formula accounts also for the rare event of zero purchases out of 100 calls. Copy the formula above in 100 cells. You will find that the minimum and maximum value will score around 10%-30%. If we were modeling the outcome of a direct marketing campaign, we could use the mmBETA function times the number of calls to determine the number of incoming clients by time unit, for instance one day.

Technical profile

Type Continuous distribution.
Syntax =mmBETA(Scale, Shape)
Domain  Monte Carlo Simulation Software: Management Process Risk Analysis
Mode if  Monte Carlo Simulation Software: Management Process Risk Analysis then =  Monte Carlo Simulation Software: Management Process Risk Analysis

If Scale = 1 and Shape = 1 then the mode is Not defined
Parameters Scale = v > 0
Shape = w > 0
Remarks If any argument is nonnumeric mmBETA returns the #VALUE! error value.
If  Monte Carlo Simulation Software: Management Process Risk Analysis or  Monte Carlo Simulation Software: Management Process Risk Analysis mmBETA returns the #NUM! error value.
Relationships It is related to the Binomial, Gamma and to the Normal variates.
Graphs
mmBETA(2, 4) mmBETA(4, 2)
 Monte Carlo Simulation Software: Management Process Risk Analysis  Monte Carlo Simulation Software: Management Process Risk Analysis
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