Standard Deviation can be defined as the measure of the variance or dispersion over an average. Normally, it is a spread of the data around the average using the standard deviation formula within a given sample. If the standard deviation is higher, then the deviation from the mean is also higher. Let us check out the utilization of standard deviation in real life.
Real Life utilization of standard deviation
Standard Deviation in the Finance Sector
Nowadays, financial analysts and business proprietors use standard deviation as a tool for decision-making and risk management. Standard deviation can be used for risk management procedures like a decrease in sales or an increase in bad client reviews. Using risk management in business, financial analysts use standard deviation to check the stock and share price volatility and can help in calculating errors posed by different surveys.
For instance, you have a construction business. You can use standard deviation to find the number of laborers needed to finish the job within the stipulated time.
Standard Deviation in the Business Sector
Within a business, there is always a clash between employees about getting underpaid for their work. Sometimes, the employer is left responsible for this issue and the work process starts decreasing. At this point, the employer would look out for the differences in their salary using standard deviation. If the standard deviation gets higher, then there is some seriousness in the issue.
For instance, an employer can check for the salary accounts of individuals with all the given data for employees with certifications and experience to get on with the payment process. A senior with many years of experience should get paid more than a fresher and that is when the standard deviation is used.
Standard Deviation in Quality Control
Within a production and manufacturing department, the most vital part is Quality Control and Quality Assurance. This is needed to use a standard as a benchmark for the creation of a product. If the benchmark is not obtained for a product, then the product gets rejected. We can find the benchmark by using Standard Deviation. If the Standard Deviation is higher, then it implies that the product must be rejected as it did not meet the standard.
We can measure the number of chemicals or synthetics used within a fruit juice using standard deviation. Suppose a bottle of fruit juice consists of a meaningful amount of 500 ml with ±3 ml of standard deviation. Then the bottle can contain 497 ml or 503 ml of fruit juice content. If the juice content is less than or higher than the standard deviation, then the product would be rejected by the organization.
Standard Deviation in Medical Fields
Standard Deviation is also used in medical studies and scientific research. Sometimes, a data or report is collected and a series of medications are used for the treatment. Standard Deviation can be used to analyze the statistics of the report and can help in finding the best clinical treatment for an illness.
For instance, let us assume that a vaccine is created for a life-threatening virus. The virus would be tested against a large number of vaccines and would be monitored continuously. The average or mean of the virus removal rate in accordance with the standard deviation should be calculated to find the antiviral effect of the samples.
Standard Deviation in our daily lives
Standard Deviation is also used even in our daily chores of life. We can check the weather forecast using Standard Deviation and can even put a tab on our everyday budget using the same.
These are the major real-life scenarios of using standard deviation. Cuemath can help students get a solid idea of statistics and various other math topics and eventually provide them with lessons and tests. For more information, visit the Cuemath website.