To update a field in Master record when child record is updated, we have to use Trigger.

Sample Trigger:

In the below trigger, if a Contact is created or updated, the Average_Rating__c field will be updated as average of all Contacts Rating__c under that Account.

trigger RatingAverage on Contact(after insert, after update) {

    Map<Id, List<Contact>> AcctCont = new Map<Id, List<Contact>>();
    Map<Id, Contact> NewMap = trigger.NewMap;
    List<Account> AcctList = new List<Account>();
    List<Contact> ContList = new List<Contact>();
    Set<ID> AcctIds = new Set<ID>();
   
    for(Contact Con : trigger.New) {
        AcctIds.add(Con.AccountId);       
    }
    System.debug(‘Account ids are ‘ + AcctIds);
   
    AcctList = [SELECT Average_Rating__c FROM Account WHERE Id IN : AcctIds];
    System.debug(‘Account List is ‘ + AcctList);
   
    ContList = [SELECT Rating__c, AccountId FROM Contact WHERE AccountID IN : AcctIds];
    System.debug(‘Contact List is ‘ + ContList);
   
    for(ID TempId : AcctIds) {
        List<Contact> TempContList = new List<Contact>();
        for(Contact Con : ContList) {
            if(Con.AccountId == TempId) {
                TempContList.add(con);
            }
            Contact TempCont = new Contact();
            System.debug(‘Contact Id is ‘ + con.Id);
        }
        AcctCont.put(TempId, TempContList);
    }
    System.debug(‘Account and contacts are ‘ + AcctCont);
   
    for(Account Acct : AcctList) {
        List<Contact> TempContList = new List<Contact>();
        Decimal Total = 0;
        System.debug(‘Account Id is ‘ + Acct.Id);
        TempContList = AcctCont.get(Acct.Id);
        for(Contact Con : TempContList) {
            Total = Total + Con.Rating__c;
        }
        Acct.Average_Rating__c = Total/(TempContList.size());
    }
    Update AcctList;
}