The mean or the average is a quick mathematical measure of a number of data points as a unit. It
will tell you important information about a group of data in your business. It
is almost a summary of all the data in your dataset. What it doesn't tell you is what the variability
of the data is. You must turn to other measures, such as standard deviation to measure variability.

An Example

Widgets from production line #1 average 3 feet 5 inches.

Widgets from production line #2 average 3 feet 11 inches.

This gives some important information about the length of widgets between line
#1 and line #2. You would be justified in saying that the widgets from line #2
are longer than from line #1. Statisticians have a more complex way of coming
to the same conclusion, but this is sufficient for simple applications. This
does not mean that you couldn't find a widget from line #1 with the same length
as a widget from line #2. Clearly the mean average is just a generalization
for a given set of data.

Calculating It

The calculation is very simple. You simply add up all the values of your data
points. Then you divide the total by the number of data points that you added together.

Possible Problems Using Mean Average

A few extreme data points can skew it.

Widely deviating data points can make the it meaningless.

Users may forget the possibility that it can be skewed.

Most of these problems can be solved by also using the standard deviation as an add on measure
of the data. If you click to What is Standard Deviation, you will find out what it is.

Summary

The mean average is a very convenient way of describing a lot of data. As long as you are confident that it is not skewed, you can use it by itself as a convenient descriptor of the value of the data.