Since the weighted average Weighted Average The weighted average formula is simply summing up the products of each value with its respective weightage. Likewise, the formula “=SUMPRODUCT(B2:B3,C2:C3)/SUM(C2:C3)” returns 6.6, which is the weighted average of employee B. The formula “=SUMPRODUCT(A2:A3,C2:C3)/SUM(C2:C3)” returns 7.4, which is the weighted average of employee A. Ignore the double quotation marks of the following entries. The employee with the higher weighted average will be promoted.Ĭells A2 and B2 contain “quality” ratings, while cells A3 and B3 contain “quantity” ratings. The former parameter is assigned 80% weight while the latter is allotted 20% weight.įor ease of understanding, we are considering only two employees (A and B). The resulting products are then summed up and divided by the sum of weights.įor example, the organization Z rates (on a scale of 10) every employee on two parameters, “quality” and “quantity” of the projects delivered. To calculate the weighted average, the numerical values are multiplied by the weights. With different weights, the importance (or significance) of each value of the dataset differs. The weighted average is used to calculate the average of numerical values that have been assigned different weights. In Excel, the weighted average is calculated by using the SUMPRODUCT function in the numerator and the SUM function in the denominator.