The assumed mean takes a ballpark guess at the mean, then uses math to calculate a number close to the mean. It is assumed because it is not an actual mean calculation. It is important to remember that the only time you should use assumed mean is if you have very small amounts of data (i.e. less than 20 entries) in your data set.
"Assumed mean" is also known as "average."
Sort your data set from smallest to largest. For example, assume your data set is 43, 45, 46, 48 and 49.
Assume a mean. This should be a number that you feel is a close representation of your data set. In a simple example, take the number in the center of your data set; in this case 46.
Subtract your assumed mean from each data entry. In the example:
Add together each difference from the mean. In the example,
Divide the sum of the differences from assumed mean by number of data points. In the example,
Add the result of the division to your assumed mean. In the example:
About the Author
Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.