GAMMA.DIST Excel

What Is GAMMA.DIST Excel function?

The GAMMA.DIST Excel function is categorized under a statistical function used to calculate the probability density function PDF of the gamma distribution. This distribution is used in model processes that include a non-negative, skewed, and continuous nature, such as time between accidents or failure times for certain components.

Below is an example that shows the functionality of the GAMMA.DIST Excel function.

Let us begin by selecting cell B3, where we will input the formula, utilizing the provided values:

=GAMMA.DIST(A2, B2, C2, TRUE)

Upon execution, we obtain a result of 0.8045, as depicted in the image below.

Syntax

• X – This is the required argument. This is the value used for calculation. It should be greater than or equal to zero.
• Alpha – This is the required argument. This parameter represents the shape of the distribution.
• Beta – This is the required argument. This is a scale parameter crucial to the distribution. When the value of beta is set to 1, GAMMA.DIST will calculate the standard gamma distribution.
• Cumulative – This is the required argument. This is the logical value that shows the form of function.
• Cumulative Distribution Function – returns TRUE.
• Probability Density Function – returns FALSE.
Key Takeaways
• The GAMMA.DIST Excel function is a statistical function used to calculate the probability density function (PDF) for the gamma distribution.
• The GAMMA.DIST Excel function takes four arguments: x (the value at which the PDF is evaluated), alpha (the shape parameter), beta (the scale parameter), and cumulative (a logical value indicating whether to calculate the cumulative distribution function instead).
• Using the GAMMA.DIST Excel function, users can easily determine the certain values occurring within a given Gamma distribution. The professionals analyze data and make decisions based on this widely applicable mathematical concept, ensuring an accurate statistical model.

How To Use GAMMA.DIST Function in Excel?

To effectively utilize the GAMMA.DIST function in Excel, follow these steps.

#1 – Access from the Excel ribbon

Step 1: Choose the empty cell which will contain the result. Go to the “Formulas” tab and click it.

Step 2: Select the “More Functions” option from the menu.

Step 3: Select the “Statistical” option from the drop-down list. Select “GAMMA.DIST” from the drop-down menu.

Step 4: A window called “Function Arguments” appears. As the number of arguments, enter the value in the “trials,” “probability_s,” and “alpha.” Select OK.

#2 – Enter the worksheet manually

Step 1: Select an empty cell for the output. Type “=GAMMA.DIST()” in the selected cell. Alternatively, type “=G” and double-click the GAMMA.DIST function from the list of suggestions shown by Excel.

Step 2: Press the “Enter” key to get the result.

Examples

Example #1 – Probability Density Function

In the following example, we will understand the workings of the GAMMA.DIST Excel function and calculate the Gamma Probability Density Function, let us look into an illustrative example.

The probability density function (PDF) represents the random variable, taking on a specific value. The PDF assigns a probability value FALSE to each possible value of the random variable to a cumulative value. It provides a comprehensive understanding of the probability distribution for continuous variables, enabling us to analyse the specific outcomes occurring.

To use the GAMMA.DIST Excel function, follow the below steps:

Step 1: Select the cell B3, where we will input the formula.

Step 2: Enter the formula in the assigned cell, and implement the provided values:

=GAMMA.DIST(A2, B2, C2, FALSE)

Step 3: The is obtained in cell B3 as value 0.0977, accompanied by a visually graphical representation, as depicted in the image below.

Note: The Gamma Probability Density Function is computed by employing the Alpha and Beta values, the Boolean value of Cumulative Distribution, and the x value.

Example #2 – Cumulative distribution function

We have explored the GAMMA.DIST Excel function in this example to calculate the Gamma Cumulative Distribution Function. Let’s look into the following steps to understand the workings of function more efficiently.

The cumulative distribution function (CDF) represents the probability that a random variable will be TRUE to a given cumulative value. This concept applies to both continuous and discrete random variables. It is important to note that the CDF is always non-negative, meaning it cannot have a negative value.

To effectively utilize the GAMMA.DIST Excel function, it is crucial to follow these steps:

Step 1: Begin by selecting cell B3, where we will input the formula.

Step 2: Input the formula in the designated cell using the provided values:

=GAMMA.DIST(A2, B2, C2, TRUE)

Step 3: Press the enter key, and the result is reflected in the cell as 0.9380, using a graphical representation to conceive the function, as depicted in the image below.

Please note that the Gamma Cumulative Distribution Function is computed by employing the Alpha and Beta values, the Boolean value of Cumulative Distribution, and the x value.

Example #3

The example shows the mechanism of the GAMMA.DIST Excel function to calculate the Gamma Cumulative Distribution Function is clarified below. Let’s see the example and its steps to utilize in our calculations.

The steps used in the example of the GAMMA.DIST Excel function is explained below:

Step 1: Insert the formula in the cell B3.

Step 2: Input the formula in the designated cell:

=GAMMA.DIST(A2, B2, C2, TRUE)

Step 3: The result is fetched in cell B3 as value 0.7576, with a graphical representation, as depicted in the image below.

Important Things To Note

• The #NUM! error arises when the value of x provided is less than zero and if either the value of alpha is less than or equal to zero or the value of beta is less than or equal to zero.
• The #VALUE! error occurs when any of the supplied arguments, namely x, alpha, or beta, are non-numeric, and if the value of cumulative is not recognized as a logical or numeric value.

1. What does the GAMMA.DIST function do?

The GAMMA.DIST Excel function is a statistical calculator in Excel that helps professionals analyze and understand data using the gamma distribution. This distribution is commonly used to model waiting times or lifetimes of processes, such as the time until a machine fails or the length of time between customer arrivals. By inputting relevant parameters like x (the value at which the distribution should be evaluated), alpha (shape parameter), and beta (scale parameter), this function calculates the probability density function (PDF) of the gamma distribution at a specific point.

Example
For example, that shows the functionality of the GAMMA.DIST Excel function with adaptive changes in X, Alpha and Beta values is explained.

Select the cell B3 to enter the below formula.

=GAMMA.DIST(A2, B2, C2, TRUE)

The result is executed in cells E2 to E6, as depicted in the image below.

2. Are there any limitations or considerations when using the GAMMA.DIST function in Excel?

The limitations of using the GAMMA.DIST Excel function are as follows;
The function assumes that the shape parameter of the gamma distribution is positive, which means it cannot be used for distributions with negative shape parameters.
We should be cautious when dealing with very small shape parameters, as they might lead to numerical instability and inaccurate results.
The function uses numerical approximation methods to calculate the cumulative distribution function (CDF) and probability density function (PDF); there should be differences in comparing manual calculations or other statistical software packages.

3. What is the benefit of using the GAMMA.DIST Excel function?

The GAMMA Excel function allows users to calculate the probability of a random variable following a gamma distribution, which is used to model data with skewed distributions such as waiting times, insurance claims, and queue lengths.
The GAMMA.DIST function provides accurate results based on the shape and scale parameters and enhances decision-making processes by enabling professionals to analyse and predict outcomes. The function takes risk assessment and management by assisting in determining the events occurring within certain time frames or budgets. It is also versatile and calculates complex probability calculations; it also helps in hypothesis testing, sensitivity analysis, simulation modelling, and actuarial science, among other applications.

4. Where is the GAMMA.DIST function in Excel?

To see where is the Excel GAMMA.DIST Function proceed to the “Formulas” tab and click on it. From the drop-down list, choose the “More Functions” option. Then, select the “Statistical” option from the drop-right menu. Click on the “GAMMA.DIST” from the provided menu. This will open a window called “Function Arguments.” Now, input the respective values for “x,” “alpha,” and “cumulative” as the number of arguments. Finally, select the “OK” button to proceed.