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Bell Curve
A probability distribution curve with normal distribution in the data set.

In the field of asset management, a bell curve represents a theoretical scenario in which the probability of failure (PoF) has a perfectly symmetrical shape. While this does not represent reality, particularly in the service life of assets, it does provide a useful theoretical reference point.


Attributes
Listed below are some of the attributes of a bell curve:


Evaluation
Listed below are some of the merits of a bell curve:
  • It provides a simple generic explanation for a probability distribution.
  • It provides a theoretical reference point from which further nuanced evaluations can be made over time.
Listed below are some of the limitations of a bell curve:
  • Most assets do not exhibit bell curve distributions and, therefore, this type of curve is not a realistic representation.
Bell curve (in "red") with perfect symmetry compared to skewed curves.
Fig. Bell curve (in "red") with perfect symmetry compared to skewed curves.

Bell curve indicating the percentage of performers along the probability distribution.
Fig. Bell curve indicating the percentage of performers along the probability distribution.

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