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Weighted Mean
The weighted mean of the selection based on a specified weighting column.
It is a mean where some values contribute more than others.
Weighted means can help with decisions where some considerations are more important than others.
The formula:
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Weighted Mean = |
Σwx |
|
Σw |
In other words: multiply each weight w by its matching value x, sum that all up, and divide by the sum of weights.
Sample 1:
Sam wants to buy a new camera, and decides on the following rating system:
q Image Quality 50%
q Battery Life 30%
q Zoom Range 20%
Based on reviews the Cony camera gets 8 (out of 10) for Image Quality, 6 for Battery Life and 7 for Zoom Range
The Sanon camera gets 9 for Image Quality, 4 for Battery Life and 6 for Zoom Range
Which camera is best?
Cony: (50/100) × 8 + (30/100) × 6 + (20/100) × 7 = 4 + 1.8 + 1.4 = 7.2
Sanon: (50/100) × 9 + (30/100) × 4 + (20/100) × 6 = 4.5 + 1.2 + 1.2 = 6.9
Sam decides to buy the Cony.
Sample 2:
A Company sells Mango products with the following Revenue breakdown for the current year:
|
Products |
Revenue |
|
Mango Tarts |
45,000 |
|
Mango Juice |
297,000 |
|
Dried Mangoes |
975,000 |
|
Total |
1,317,000 |
The revenue values per product.
The Company posted an increase in revenue from the previous year with the following Percentage Change:
|
Products |
Revenue Percentage Change |
|
Mango Tarts |
50% |
|
Mango Juice |
10% |
|
Dried Mangoes |
30% |
Revenue percentage change values.
Compute for the all-over revenue change percent:
((50/100) x 45,000 + (10/100) x 297,000 + (30/100) x 975,000) / 1,317,000
or
(22,500 + 29,700 + 292,500) / 1,317,000 = .26 or 26%