## What is standard deviation?

In fact, a standard deviation from the mean will shed light on the essence of many of the processes in your business. It plays a decisive role in most statistical calculations.

The standard deviation illustrates the size of the scatter of what you measure (employee productivity, quantity of goods in stock, price differences) over time. The closer the deviation is to zero, the more reliable the data.

Imagine that you own two stores. In order to avoid losses, it is important that there is a clear control of stock balances.

In order to find out which of the managers is better at managing inventory, you may decide to analyze the quantity of goods in stock over the past six weeks. The standard deviation illustrates the size of the dispersion of goods in the warehouse. The closer the standard deviation to zero, the better the manager will cope with timely replenishment of the warehouse.