What is weighted average in SAP EPM-SM - Strategy Management?

SAP Term: weighted average

• Component: EPM-SM

• Component Name: Strategy Management

• Description: A calculation method based on averaging of KPIs where some KPIs more or more or less important than others.

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• Key Concepts: 
  Weighted average is a calculation used in SAP EPM-SM Strategy Management to determine the relative importance of different elements in a set of data. It is calculated by multiplying each element by its weight, then summing the results and dividing by the total weight. This calculation is useful for making decisions based on multiple factors. 
  
  How to use it: 
  Weighted average can be used in SAP EPM-SM Strategy Management to make decisions based on multiple factors. To calculate the weighted average, first assign a weight to each element in the set of data. Then, multiply each element by its weight and sum the results. Finally, divide the sum by the total weight to get the weighted average. 
  
  Tips & Tricks: 
  When assigning weights to elements in a set of data, it is important to consider how important each element is relative to the others. For example, if one element is more important than another, it should be assigned a higher weight. This will ensure that the weighted average accurately reflects the relative importance of each element. 
  
  Related Information: 
  Weighted average can also be used in other areas such as finance and economics. For more information on weighted average and how it can be used in different contexts, please refer to the following resources: 
  - Investopedia: https://www.investopedia.com/terms/w/weightedaverage.asp 
  - Khan Academy: https://www.khanacademy.org/math/algebra2/x2ec2f6f830c9fb89:weighted-averages