Tutorial Random Number Generation in Excel

Purpose: This tutorial shows you how to generate random number series in excel
using the data tool Data Analysis which comes as a standard add-on via the excel package Analysis ToolPak. There are two exercises in this tutorial. The first exercise walks you through generating random numbers from a normal distribution and then plotting a histogram of the numbers that you generated. The second exercise does more or less the same except that this time you generate the random numbers from a binomial distribution and then plot a histogram of the generated numbers.

Exercise 1 (Random Numbers from a Normal Distribution)

1. Creating a random series of Normal Distribution - Select Tool/Data Analysis/Random Number Generation - Then the Random Number Generation Box appears

On line Number of Variables, type 1 (We need only one series of normal distribution number, if you want 2 series, then type 2) On line Number of Random Numbers, type 100 or any number that you wish for your random series Click on line Distribution, then choose Normal On line Mean, type 0 (or any number that you wish to be the mean of your random series) On line Standard Deviation, type 1 (or any number that you wish to be the standard deviation of your random series) Click OK The generated series has been sent to new worksheet 1

2. Drawing the histogram of the generated random series of normal distribution - Move to the new worksheet that contains the random series - On the first cell of the column next to your random series, type =min(A1:A100) - On the next cell, type = max (A1:A100) - Based on the minimum and maximum of your generated series, creating bin - Lets say that your Min is -2.45316 and your Max is 2.769448. Then we will create Bin in the range -2 and 2 with 0.5 step between 2 consecutive bins. That is, type -2, -1.5,-1,-0.5,0,0.5,1,1.5,2 in the column next to your min and max column. -

Click on Tool/Data Analysis/Histogram The Histogram box appears, . Click on the Input Range line, then highlight the area of your generated random series, say A1:A100 . On the Bin Range, highlight the area of your bin, say C1:C9 . Tick on box Pareto (sorted histogram), Cumulative Percentage, and Chart Output, then click Ok. - The output has been sent to a new worksheet

Exercise 2 (Random Numbers from a Binomial Distribution)

Assume that you are concerned with a problem of a workshop with 5 machines. The probability of a machine that does not working in one day is 0.1. You want to create a random series of the number of machine that does not working in 100 days. Obviously, the series follow the binominal distribution with n=5 and p=0.1. - Select Tool/Data Analysis/Random Number Generation - The Random Number Generation Box appear, . On the Number of Variables line, type 1 . On the Number of Random Numbers, type 100 (mean 100 days) . On the Distribution line, choose Binominal . On the p-Value line, type 0.1 (since p=0.1) . On the Number of trials, type 5 (since there are 5 machines) .Click Ok - The generated series has been sent to a new worksheet

Drawing the histogram of the generated binominal random series

First we have to create Bin. Since we are interested in the number of machine that does not working in one day, we should create Bin from 0 to 5 with a step of 1 between 2 consecutive bin, that is our bin is 0, 1, 2, 3, 4, 5. Type 0, 1, 2, 3, 4, 5 on the column next to the column contains your generated series Select Tool/Data Analysis/Histogram and following what have been instructed in the section of drawing histogram for normal random series.