Weighted Average Formulas

janema

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Joined
Nov 28, 2022
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Hi, I am confused at how I need to write a weighted average formula. I need the weighted average of Column F (Average Gap) shown in the image, but am not sure if I need to reference another column as many excel sites are instructing. That part doesn't make sense to me. :confused:

The formulas to calculate the average gap in column F is =(C2-D2)/B2
However, I am not understanding what it is weight again in the weight average excel formulas. Clearly the first formula I tried is wrong, because it came out to a weighted average of $9.30

1st attempt: =SUMPRODUCT(B2:B15,F2:F15)/SUM(F2:F15)



1739503072204.png
 
Hi,

in the first array in your sumproduct formula you need to firstly build the difference between target and actual. I believe the below will give you what you are after:

Let Function - Reduce and Lambda and ByRows to compile business contacts.xlsx
AIAJAK
26# 0f EmployeesTarget BonusAverage
27210,000.007,500.00
28315,000.0012,500.00
29525,000.0022,500.00
30635,000.0030,000.00
31745,000.0040,000.00
322100,000.0075,000.00
33
34
35
36Weighted Avgr5,600.00
Report1
Cell Formulas
RangeFormula
AK36AK36=SUMPRODUCT(((AJ27:AJ32)-(AK27:AK32)),(AI27:AI32))/SUM(AI27:AI32)
 
Upvote 0
Hi,

in the first array in your sumproduct formula you need to firstly build the difference between target and actual. I believe the below will give you what you are after:

Let Function - Reduce and Lambda and ByRows to compile business contacts.xlsx
AIAJAK
26# 0f EmployeesTarget BonusAverage
27210,000.007,500.00
28315,000.0012,500.00
29525,000.0022,500.00
30635,000.0030,000.00
31745,000.0040,000.00
322100,000.0075,000.00
33
34
35
36Weighted Avgr5,600.00
Report1
Cell Formulas
RangeFormula
AK36AK36=SUMPRODUCT(((AJ27:AJ32)-(AK27:AK32)),(AI27:AI32))/SUM(AI27:AI32)

Thank you... I don't think I am building the formula correctly. It came out an outrageous number. 🤦‍♀️ I am terrible at this.
 
Upvote 0
Or,
Excel Formula:
=ROUND(SUMPRODUCT(($C$2:$C$15/$B$2:$B$15 - $E$2:$E$15), $B$2:$B$15) / SUM($B$2:$B$15),0)
 
Upvote 0
Solution
Or,
Excel Formula:
=ROUND(SUMPRODUCT(($C$2:$C$15/$B$2:$B$15 - $E$2:$E$15), $B$2:$B$15) / SUM($B$2:$B$15),0)

I think that worked! The number wasn't a crazy number using this. Thank you so much everyone.
 
Upvote 0
No Problem, This formula first converts the target bonus into a per-employee value, subtracts the actual per-employee bonus, weights by the number of employees, and finally divides by the total number of employees to get the weighted average.

@Holger was super close to it
 
Upvote 0

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