Weighted Average

A Weighted Average is a special kind of average that gives different values in a dataset more ‘weight’ or importance than others. In business intelligence and data analytics, it’s like telling a story where some voices get to speak a little louder. For example, if you’re looking at customer reviews for your company’s products, a weighted average could give more importance to reviews from verified buyers or frequent shoppers.

This method comes in handy when you’re dealing with data that isn’t all equally relevant. Let’s say a business sells a ton of gadgets during the holidays, but not so much the rest of the year. Using a weighted average can give more weight to the high-selling months to help understand typical sales patterns and make better decisions about buying inventory or setting prices.

In short, using a weighted average is a way to make your data more truthful about what’s really going on. It helps businesses focus on the information that matters most, ensuring that their analysis is accurate and reflective of the situation, which leads to smarter strategies and better outcomes.