Quite often we need to measure two characteristics on each sampled item. When this is the case – when we collect two pieces of information (measuring two variables) on each sampled unit – the resulting data are referred to as bivariate.

Use: The situation is very common in business and industry. For example, we typically measure the internal rate of return and the net present value for each project we are considering in order to choose the best subset of projects among those submitted for approval. Rare is the company that can run all projects at a given time.

You might want to use the bivariate distribution in an attempt to show a correlation between two variables.

Six Sigma Terminology