Forecasting Monthly Expenditures Using Normal Distribution in Excel

In summary, the conversation is about using Excel to forecast future monthly expenditures for a construction project with a budget of $12 million from July 2008 to December 2010. The question involves using a normal distribution model and a linear regression approach. The person asking for input is seeking help with this task and asks if the costs appear normally distributed.
  • #1
physics911
1
0
Hi, everyone,

I have a quick question for normal distribution in Excel.

There's a construction project with the following monthly expenditures:

JUL 2008 $ 4,903
AUG 2008 $ 3,591
SEP 2008 $ 15,452
OCT 2008 $ 12,806
NOV 2008 $ 59,988
DEC 2008 $ 121,808
JAN 2009 $ 261,162
FEB 2009 $ 264,769
MAR 2009 $ 306,240
APR 2009 $ 438,695
MAY 2009 $ 397,569
JUN 2009 $ 345,190


The project's allocated amount is $12 million and the time period is from July 2008 to December 2010. Is there anyway I can forecast future monthly expenditures (from July 2009 & onwards) based on normal distribution model using Excel 2003?

Your input is greatly appreciated.

Thank you.

Physics911
 
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  • #2
Do those costs look normally distrubuted to you?

I think you'd do better to approach it from a linear regression point of view.BTW. This looks like homework. Is it?
 

Related to Forecasting Monthly Expenditures Using Normal Distribution in Excel

What is the Normal Distribution for Excel?

The Normal Distribution for Excel is a statistical function that calculates the probability of a data point falling within a certain range in a dataset. It is commonly used to analyze and interpret data in fields such as finance, economics, and social sciences.

How do I generate a Normal Distribution in Excel?

To generate a Normal Distribution in Excel, you can use the NORM.DIST function. This function takes in parameters such as the mean, standard deviation, and input value to calculate the probability of that value occurring in the dataset. You can also use the NORM.S.DIST function for standardizing the data before calculating the probability.

What is the difference between a Normal Distribution and a Standard Normal Distribution?

A Normal Distribution is a distribution of data that follows a bell-shaped curve, while a Standard Normal Distribution is a special case where the mean is 0 and the standard deviation is 1. The Standard Normal Distribution is commonly used for comparison and has a standardized table for calculating probabilities.

Can the Normal Distribution be used for any type of data?

The Normal Distribution is best suited for continuous data that is normally distributed, meaning it follows a bell-shaped curve. It can also be used for discrete data with a large sample size, as it approximates a continuous distribution. However, it may not be suitable for data with extreme outliers or a skewed distribution.

How can I interpret the results of a Normal Distribution in Excel?

The results of a Normal Distribution in Excel can be interpreted as the probability of a data point falling within a certain range in the dataset. For example, if the result is 0.5, it means that there is a 50% chance of a data point falling within that range. The results can also be used to compare different datasets or to make predictions based on the probability of certain events occurring.

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