As per the definiton of weighted average, its is the sum of datapoints*weights / sum of weights. Hence each data point contributes to the average according to the weight associated to it.
For example: Table Fact_Balance_01 has columns
Book_Balance
,Term
To calculate a weighted average Balance_Term , we have
Select
Term
,Sum(Book_Balance * Term)/Sum(NULLIFZERO(Book_Value))
From
Fact_Balance_01
Group by 1
How it helps?
Over a period, it gives us a graph. Also called the SMA graph.
It can be effectively used to see where your business is headed.
For example: Table Fact_Balance_01 has columns
Book_Balance
,Term
To calculate a weighted average Balance_Term , we have
Select
Term
,Sum(Book_Balance * Term)/Sum(NULLIFZERO(Book_Value))
From
Fact_Balance_01
Group by 1
How it helps?
Over a period, it gives us a graph. Also called the SMA graph.
It can be effectively used to see where your business is headed.
