Assumptions and method
Sample standard deviation uses n−1. Outliers, dependence and measurement errors still need inspection.
Test a scenario
Use the result in a decision
Understand the sampling design, units and distribution assumptions.
Sample standard deviation uses n−1. Outliers, dependence and measurement errors still need inspection.
Set a baseline and change one assumption to compare outcomes.
A worked example
Follow the fixed teaching example
- Mean = (4 + 6 + 6 + 8 + 11)/5 = 7.
- Squared deviations sum to 28. Sample variance = 28/(5 − 1) = 7.
These illustrative inputs describe a project scenario, not a published benchmark. All monetary inputs use the same currency and price basis.
- Observations
- 4, 6, 6, 8, 11
- Count
- 5
- Mean
- 7
- Median
- 6
- Sample standard deviation
- 2.6458
- Minimum
- 4
- Maximum
- 11
Interpret the output only within the assumptions above. Changing the inputs changes the result; it does not validate the inputs.
Source & credit
Standard mathematical statistics; the handbook is an authoritative technical reference, not a claim of sole origin.
NIST/SEMATECH: statistical methods
This is independently written code and explanation of the underlying method. The linked publication, its diagrams and its trademarks remain its owner’s material; no permission to reuse them is implied.