How to calculate the standard deviation?

Question

I have two questions:

- Why/How is the standard deviation used in project management? (a concise definition for the term in a PM context would be great)
- How is the standard deviation calculated in PM?

I have a couple of years of experience in project management, but I have never used SD in my projects so far (I don't even know what's the benefit of doing this).

Answer 1

Standard deviation has a lot of applications in general.  In project management the most common usage is to calculate the confidence of estimates for the PERT technique.  There is a good article on this at http://www.deepfriedbrainproject.com/2010/07/magical-formula-of-pert.html.  If you take the maximum estimate, subtract the minimum estimate, and then divide that by 6, you have the standard deviation.