How you can effectively apply Standard Deviation to your daily work.

Standard Deviation is not necessarily useful when you try to use it at your daily work.

Coefficient of variation(C/V) will solve the issue, especially when you compare the two data sets in terms of its variance.

Coefficient of variation resolves the difference of the data value by dividing the standard deviation by the average of the data set.

Coefficient of variation(C/V) = Standard deviation / average

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If you compare daily sales variance between a big store and a small store as the example shows,you cannot simply compare the standard deviations as their sales revenues are not at the same level.

You can offset the difference by dividing SD by the average and get the C/V as shown.

While the big store has higher SD (“25”) than one of small store (“15”), C/V of the small store is higher. It concludes that sales variance of the small store is higher than that of the big store.

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