When would you use the median instead of the mean? Give a business example.
What the interviewer wants to hear
- Median is robust to outliers and skew
- Mean is pulled by extreme values
- Example such as salary, house price or order value
- Often report both to show the skew
Model answer
I use the median when the data is skewed or has outliers, because the mean gets pulled toward extreme values while the median is just the middle value. A good example is delivery time. Most orders arrive in 30 minutes, but a few take 5 hours because of a system issue. The mean might show 50 minutes, which no customer actually experienced, while the median shows about 30 minutes, the typical experience. Salaries and house prices are other classic examples. That said, the mean is still useful when the total matters, for example total revenue equals mean order value times the number of orders. In reports I often show both, along with a percentile like p90, because the gap between mean and median itself tells you the data is skewed.
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