In order to calculate the mean height, Snow White had to first
calculate the sum of the heights of the Dwarves ($S$), and then
divide by 7. Her value for $S$ was too small by 3 cm, so her value
for the mean was too small by $3/7 \approx 0.4$ cm. So the actual
mean height is $112.3+0.4=112.7$ cm.
This problem is taken from the UKMT Mathematical Challenges.