Statistical Functions
Advanced
VAR Function
How spread out the numbers are, in squared units.
Task:
Two suppliers can average the same lead time and behave completely differently. Put the variance of these five lead times in B7.
Learning Objectives:
- Compute variance with VAR
- Understand variance as the average squared distance from the mean
- See why squared units are hard to interpret
Hints
Solve without hints for +5 XP
The data in this exercise
This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.
| A | B | |
|---|---|---|
| 1 | Month | Lead time (days) |
| 2 | January | 9 |
| 3 | February | 14 |
| 4 | March | 7 |
| 5 | April | 16 |
| 6 | May | 4 |
| 7 | Variance |
What this exercise teaches (contains the answer)
These lead times average exactly 10 days, but they run from 4 to 16 — this supplier is not reliable, and the mean alone would never have said so. Variance puts a number on that spread. Its one awkwardness is the units: squaring the distances leaves the answer, 24.5, in days-squared, which nobody can picture. STDEV, next, exists to fix precisely that.