Mean deviation is a measure of dispersion that calculates the average distance of data points from the central value (usually the mean). It is calculated by taking the absolute value of differences between each data point and the mean, then finding the average of those absolute differences. For a sample of data, the formula is the sum of the absolute values of (x - x-bar) divided by n. Mean deviation indicates how far data points typically are from the central value. It is useful for business applications but can be affected by outliers and does not retain positive and negative signs.