Weighted harmonic mean, Applied Statistics

Assignment Help:

Weighted Harmonic Mean

Weighted Harmonic Mean is calculated with the help of the following formula:

WHM


2303_weighted harmonic mean.png

Case 1

 

 

Consider a company consisting of only two divisions A and B. The calculation of the net profit margin for the two divisions as well as for the company as a whole is shown below:

 

Division A

Division B

Whole company
(A + B)


Net profits  (Rs. crore)

6

1

7

Sales (Rs. crore)

40

40

80

Net profit margin

15%

2.5%

8.75%                                          


Here we see that the net profit margin for the company as a whole is 8.75% which is nothing but the Simple Arithmetic Mean of the net profit margins of the two divisions A and B.

722_weighted harmonic mean1.png

So the simple arithmetic mean has a significance here. Note that the net profit margins of the two divisions A and B have been calculated with the same denominator (Sales = Rs.40 crore). In general, we can say that the appropriate mean for a set of ratios which have been calculated with the same denominators is the simple arithmetic mean.

 


 

 

 

 


Related Discussions:- Weighted harmonic mean

Time series, Year Production 2006 8 2007 6 2008 10 2009 12 2010 11 2011 15 ...

Year Production 2006 8 2007 6 2008 10 2009 12 2010 11 2011 15 2012 14 2013 16 Determine the trend from data given above?

Team Collaboration: Business Decision Making Project, Collect data about th...

Collect data about the chosen business problem or opportunity at the company. Explain how you obtained a suitable sample of either qualitative or quantitative data. Review data f

Decision making ., it is said that management is equivalent to decision mak...

it is said that management is equivalent to decision making? do you agree? explain

Diversity of data for the age, The box plot displays the diversity of data ...

The box plot displays the diversity of data for the age; the data ranges from 19 being the minimum value and 60 being the maximum value. The box plot is positively skewed at 0.57 a

Testing of hypothesis, Testing of Hypothesis One objective of sampling...

Testing of Hypothesis One objective of sampling theory is Hypothesis Testing. Hypothesis testing begins by making an assumption about the population parameter. Then we gather

Limitations of arithmetic mean, The calculations of arithmetic mean m...

The calculations of arithmetic mean may be simple and foolproof, but the application of the result may not be so foolproof. An arithmetic mean may not merely lack

Coefficient of determination, Coefficient of Determination The c...

Coefficient of Determination The coefficient of determination is given by r 2 i.e., the square of the correlation coefficient. It explains to what extent the variation

LPP, b. A paper mill produces two grades of paper viz., X and Y. Because of...

b. A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd