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Excel's
PERCENTILE() function is useful in many
Monte Carlo models, and is particularly
useful in answering the main questions
behind our Commute Time simulation.
Remember, the questions were:
1. How
much time do I need to allow in order to
have 75% confidence that I will arrive on
time?
2. How much time should I allow in
order to have 99.5% confidence that I will
arrive on time (on days that start with an
important meeting)?
As
illustrated below, the simple equation
=PERCENTILE(F10:F10009, 0.75)
yields the answer to the first question.
Substituting .995 in place of 0.75 as the
second argument in the function answers the
second question.
Thus we know we can arrive on time about 75%
of the time by allowing 8.1 minutes for our
commute, but we should allow a full 36.4
minutes in order to have a 99.5% chance of
arriving on time.
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