P08StatisticsIntermediateInterpret12 min
Compare Variability Using Standard Deviation
Compare two product lines with similar average demand but different week-to-week volatility.
#standard deviation#variability#operations
Scenario
Two products both average 100 weekly units sold. Inventory planning needs to know which demand pattern is less predictable.
Problem statement
Explain how standard deviation helps compare the two series and what other context you would check before ordering inventory.
Your Task
- Identify which series is more variable from its standard deviation.
- Explain why equal means do not imply equal planning risk.
- Name one limitation of using standard deviation alone.
Weekly summary
Product A: mean = 100, standard deviation = 8
Product B: mean = 100, standard deviation = 35
Related Concepts
Distribution spreadInventory planningTime series
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