This might be a simple question…
I was wondering, how does one take a double weighted average? (honestly, don't know if that is what it is called). For example, let's say that we are working with data from the table below:
Cellphone type | # of phones sold | # of hours spent on design | Profit
-------------- ---------------- --------------------------- ------
Iphone 1,000 200 $30K
Samsung 3,000 150 $40K
HTC 7,000 140 $35K
1) I know that the simple average of the profit is: $35K
2) I also know that the average weighed by # of phones sold is: $35.9091K
3) And, that the average weighted by # of hours spent on design is $34.4898K
Now, what is the profit average weighted by # of phones sold and # of hours spent on design? Is it a simple average between 2 and 3?
Best Answer
You can't do this without further information. The second weighted average should be weighted with respect to how important the metrics are to you - perhaps you care twice as much about # of hours than # of sales. In that case you would do
$$ave= 2[\text{weighted by hours worked}]+1[\text{weighted by sales}]$$