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Random variable |
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Definition of Random variableRandom variableA function that assigns a real number to each and every possible outcome of a random experiment.
Related Terms:Continuous random variableA random value that can take any fractional value within specified ranges, as Discrete random variableA random variable that can take only a certain specified set of discrete possible Normal random variableA random variable that has a normal probability distribution. Correlation coefficientA standardized statistical measure of the dependence of two random variables, CovarianceA statistical measure of the degree to which random variables move together. Cumulative probability distributionA function that shows the probability that the random variable will MeanThe expected value of a random variable. Normal probability distributionA probability distribution for a continuous random variable that is forms a Probability density functionThe probability function for a continuous random variable. Probability distributionAlso called a probability function, a function that describes all the values that the random variable can Regression toward the meanThe tendency for subsequent observations of a random variable to be closer to its mean. StochasticInvolving or containing a random variable or variables; involving decision variablean unknown item for which a linear programming dependent variablean unknown variable that is to be predicted Endogenous variableA value determined within the context of a model. Exogenous variableA variable whose value is determined outside the model in which it is used. Also called independent variablea variable that, when changed, will key variablea critical factor that management believes will Random-location storageThe technique of storing incoming inventory in any Random walkTheory that stock price changes from day to day are at random; the changes are independent random walk theorySecurity prices change randomly, with no predictable trends or patterns. Randomized strategyA strategy of introducing into the decision-making process a random element that is Semi-variable costsCosts that have both fixed and variable components. slack variablea variable used in a linear programming problem surplus variablea variable used in a linear programming problem that represents overachievement of a minimum requirement; it is associated with greater-than-or-equal-to constraints VariableA value determined within the context of a model. Also called endogenous variable. Variable annuitiesAnnuity contracts in which the issuer pays a periodic amount linked to the investment Variable AnnuityA form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account. Variable costA cost that is directly proportional to the volume of output produced. When production is zero, Variable costA cost that increases or decreases in proportion with increases or decreases in the volume of production of goods or services. variable costa cost that varies in total in direct proportion Variable costA cost that changes in amount in relation to changes in a related activity. variable cost ratiothe proportion of each revenue dollar Variable costingA method of costing in which only variable production costs are treated as product costs and in which all fixed (production and non-production) costs are treated as period costs. variable costinga cost accumulation and reporting method variable costsCosts that change as the level of output changes. VARIABLE EXPENSESThose that vary with the amount of goods you produce or sell. These may include utility bills, labor, etc. variable expensesExpenses that change with changes in either sales volume Variable life insurance policyA whole life insurance policy that provides a death benefit dependent on the variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity Variable price securityA security, such as stocks or bonds, that sells at a fluctuating, market-determined price. Variable rate CDsShort-term certificate of deposits that pay interest periodically on roll dates. On each roll Variable rate loanLoan made at an interest rate that fluctuates based on a base interest rate such as the Variable rated demand bond (VRDB)Floating rate bond that can be sold back periodically to the issuer. CorrelationThe simultaneous change in value of two random numeric variables.
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