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- 1. MARKETING EMPIRE Standard Deviation and Variance Deviation just means how far from the normalStandard DeviationThe Standard Deviation is a measure of how spread out numbers are.Its symbol is σ (the greek letter sigma)The formula is easy: it is the square root of the Variance. So now you ask, "What is theVariance?"VarianceThe Variance is defined as: The average of the squared differences from the Mean.To calculate the variance follow these steps: Work out the Mean (the simple average of the numbers) Then for each number: subtract the Mean and then square the result (the squared difference). Then work out the average of those squared differences.ExampleYou and your friends have just measured the heights of your dogs (in millimeters): www.marketingempire.org
- 2. MARKETING EMPIREThe heights (at the shoulders) are: 600mm, 470mm, 170mm, 430mm and 300mm.Find out the Mean, the Variance, and the Standard Deviation.Your first step is to find the Mean:Answer: 600 + 470 + 170 + 430 + 300 1970 Mean = = = 394 5 5so the mean (average) height is 394 mm. Lets plot this on the chart:Now, we calculate each dogs difference from the Mean:To calculate the Variance, take each difference, square it, and then average the result: 2062 + 762 + (-224)2 + 362 + (-94)2 108,520 2 Variance: σ = = = 21,704 5 5So, the Variance is 21,704.And the Standard Deviation is just the square root of Variance, so: www.marketingempire.org
- 3. MARKETING EMPIREStandard Deviation: σ = √21,704 = 147.32... = 147 (to the nearest mm)And the good thing about the Standard Deviation is that it is useful. Now we can showwhich heights are within one Standard Deviation (147mm) of the Mean:So, using the Standard Deviation we have a "standard" way of knowing what is normal, andwhat is extra large or extra small.Rottweillers are tall dogs. And Dachsunds are a bit short ... but dont tell them!*Note: Why square ?Squaring each difference makes them all positive numbers (to avoid negatives reducing theVariance)And it also makes the bigger differences stand out. For example 1002=10,000 is a lot biggerthan 502=2,500.But squaring them makes the final answer really big, and so un-squaring the Variance (bytaking the square root) makes the Standard Deviation a much more useful number. SEE BELOW www.marketingempire.org
- 4. MARKETING EMPIRE MAKE IT MORE CLEAR QUESTION ANSWERwww.marketingempire.org

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