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Cu115 Week 4

This document provides information about the course BBA121 - Business Mathematics taught by Ms. Tembo Tamara. It discusses various index number methods including the simple aggregative method, simple average of price relatives method, Laspeyre's price index number, Paasche's price index number, Marshall's index number, Fisher's ideal index number, weighted price relative method, and the consumer price index. Examples are provided to illustrate how to calculate each of these index numbers.

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Beatrice Chungu
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22 views15 pages

Cu115 Week 4

This document provides information about the course BBA121 - Business Mathematics taught by Ms. Tembo Tamara. It discusses various index number methods including the simple aggregative method, simple average of price relatives method, Laspeyre's price index number, Paasche's price index number, Marshall's index number, Fisher's ideal index number, weighted price relative method, and the consumer price index. Examples are provided to illustrate how to calculate each of these index numbers.

Uploaded by

Beatrice Chungu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BBA121 – BUSINESS MATHEMATICS

Lecturer: Ms. Tembo Tamara


Contact: [email protected]
Office Hours: Tues – Thurs (12-14)

© 2022. Cavendish University. Private and Confidential 1


INDEX NUMBERS

• An index number is a statistical measure,


designed to measure changes in a variable, or a
group of related variables.

• Index number in the base year is always 100%.


Simple aggregative method:

• is the total of current year’s prices for the various items


• is the total of base year’s prices for the various items

• Base year: the year with which the values from other years
are compared.
EXAMPLE
Commodity Prices for 2018 Prices for 2022

A 2 5
B 4 8
C 3 2
D 5 10
Simple Average of Price Relatives Method
Weighted Index: Laspeyre’s price index
number
EXAMPLE
Commodity Prices for Quantiti Prices for Quantities
2018 es for 2022 for 2022
2018
A 2 40 5 60

B 4 16 8 40

C 3 10 2 26

D 5 28 10 75
Paasche’s price index number
Marshall’s Index Number
Fisher’s Ideal Index Number
Weighted Price Relative Method

𝑷 𝟎𝟏 =
∑𝑾
𝑷𝟏
𝑷𝟎 (
× 𝟏𝟎𝟎
)
∑𝑾
Consumer Price Index

C.P.I =
Where:
EXAMPLE
Commod Maize- Rice Sugar Butter Oil
ities meal

Weights
40 20 15 20 5
Price
2010
16 40 0.5 5.12 2
Price
2012
20 60 0.5 6.25 1.5

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