Mathematical properties of the risk equation when variability is present

Abstract

When random variables are used to represent variability, the risk equation has mathematical properties poorly understood by many risk assessors, variability represents the heterogeneity in a well‐characterized population, usually not reducible through further measurement or study. We follow the lead of most mathematicians in using random variables to represent and analyze variability. To illustrate the issues, we use LogNormal distributions to model variability.

Key words:

• probabilistic risk assessment
• Monte Carlo
• LogNormal distributions

Notes

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