In the Olympic bid proposal discussed in Example 12.8, ticket sales revenue was estimated to be a triangular distribution with minimum= $560 million, maximum = $600 million, and most likely = $600 million. Generate a random variate from this distribution.

Data from Example 12.8

In 1990, Cincinnati was one of six cities in the United States that submitted a proposal to host the 2012 Olympics. The author was involved in assisting the committee to conduct a risk analysis of their budget to predict whether the budget would be met (a condition required by the U.S. Olympic Committee). Because of the uncertainty in estimating many of the financial parameters, such as TV broadcast revenues, ticket sales, and so on, triangular distributions were used to model these uncertainties. Figure 12.9 shows a spreadsheet (Excel file Triangular Random Variates) with the parameters used for estimating broadcast revenues. Formula (12.4) was used to generate the random variate in cell B10. The spreadsheet also shows a table with 100 samples from the distribution. The histogram shows that the distribution is roughly triangular; however, with only 100 samples, there will be considerable variation in the outcomes as the spreadsheet is recalculated.