how do I calculate weighted average between percentages

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kat35601

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I have a list of locations each with the projected percentage of sales for 12months and the percentage of freight cost for each location. I want to come up with a freight percentage that will average out across all the locations. So instead of each location having it's on freight percentage we want to have one freight charge for all so one is not pay more that the others for freight. So do I multiply sales times freight and then add them to get the weighted freight?

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kat35601 said:
I have a list of locations each with the projected percentage of sales for 12months and the percentage of freight cost for each location. I want to come up with a freight percentage that will average out across all the locations. So instead of each location having it's on freight percentage we want to have one freight charge for all so one is not pay more that the others for freight. So do I multiply sales times freight and then add them to get the weighted freight?

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Percentages of what? What is 100%?
 
and maybe I am not ask the question correctly. instead of having all the different freight I want to have one and I could just average the freight and get 21% but I want to be as fair so that is why the I wanted it weighted by sales percentage .
 
rounding ....Freight want be 100% as it is the percent times dollar amount ordered that the freight company charges me to deliver the items.
 
kat35601 said:
I have a list of locations each with the projected percentage of sales for 12months and the percentage of freight cost for each location. I want to come up with a freight percentage that will average out across all the locations. So instead of each location having it's on freight percentage we want to have one freight charge for all so one is not pay more that the others for freight. So do I multiply sales times freight and then add them to get the weighted freight?

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1) If you are going to weight by Sales, make sure your Sales percentages sum to Unity (1). 99% isn't good enough. Given rounding problems, it may be traditional to add any extra rounding weight to the one that is already the largest. Thus, make 19% into 20% and move on. You could also use more decimal places and make the error smaller. You must choose what works for you in solving this problem, but the sum being Unity is not optional.

2) Sum all the locations' individual Freight-Weight, Sales * Freight, to produce your total "Weighted Freight".

3) Make sure you believe it. Frankly, the value 20.26% does not strike me as reasonable. Only two locations are above that! Something wrong with that, I think. Either there is a problem with those two locations or you are requiring the other locations to subsidize heavily. This may or may not be a problem with the locations required to subsidize. That's a business decision. Without the bottom two, we get only 16.26%, a much more reasonable-looking number.
 
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