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Negative Skewness

Negative skewness has two applications in the field of asset management:


1.  Probability Distributions for Asset Service Lives

Asymmetry (skewness) in a probability distribution, to the right (negative) of the mean. This concept can be applied to the following:

  • Forecasting the probability distributions of individual assets (remaining useful life).
Other forms of asymmetry: Positive aging: The longer the component has been in service, the more likely it is to fail. In other words, the hazard function increases for larger values of t. This makes intuitive sense, because the longer stuff is used, the more it wears down. Thus, something that has been in use for a long time will be approaching its breaking point.
Generic right-modal curve (negative skewness)
Fig. Generic right-modal curve (negative skewness).


Comparison of negative and positive skewness on a probability distribution.
Fig. Comparison of negative and positive skewness on a probability distribution.



2.  Project Distributions in a Planning Horizon

A back-end loading on a tactical plan or a strategic plan or a funding model represented by a moving average graph will have negative skewness.

2. Project Distributions in a Planning Horizon
A strategic plan with most of the projects occurring within the second half of the planning window. This is characteristic of buildings in the childhood life stage and adolescent life stages.
Fig. Back-end loading on a strategic plan which has negative skewness.


A funding scenario in which special assessments occur during the latter half of the strategic window.
Fig. Back-end loading on a funding model, which results in negative skewness.

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