Mba Slm-Unit-15-Mbf103.Pdf
Statistics for Management
Unit 15
Unit 15
Index Numbers
Structure: 15.1 Introduction Learning Objectives 15.2 Definition of an Index Number Relative Classification of index numbers Base year and current year Chief characteristics of index numbers Main steps in the construction of index numbers 15.3 Methods of Computation of Index Numbers Unweighted index numbers Weighted index numbers 15.4 Tests for Adequacy of Index Number Formulae 15.5 Cost of Living Index Numbers of Consumer Price Index Utility of consumer price index numbers Assumptions of cost of living index number Steps in construction of cost of living index numbers 15.6 Methods of Constructing Consumer Price Index Aggregate expenditure method Family budget method Weight average of price relatives 15.7 Limitations of Index Numbers 15.8 Utility and Importance of Index Numbers 15.9 Summary 15.10 Terminal Questions 15.11 Answers to SAQs and TQs Answers to Self Assessment Questions Answers to Terminal Questions 15.12 References
15.1 Introduction
In the unit 14, ‘Time Series Analysis’, you have studied about the definition and components of time series. You have also studied about different forecasting methods using time series analysis. In this unit 15, ‘Index
Sikkim Manipal University Page No. 360
Statistics for Management
Unit 15
Numbers’, we will discuss about the meaning and definition of index numbers, the types of indices along with examples. You will also study about different kinds of index numbers. Finally, you will study about the limitations of index numbers. We know that most values change and therefore we may want to know how much change has taken place over a period of time. For example, we may want to know how much the prices of different items essential to a household have increased or decreased so that necessary adjustments can be made in the monthly budget. However, while price of a few items may have increased, others may have decreased over a given period of time.
Unit 15
Unit 15
Index Numbers
Structure: 15.1 Introduction Learning Objectives 15.2 Definition of an Index Number Relative Classification of index numbers Base year and current year Chief characteristics of index numbers Main steps in the construction of index numbers 15.3 Methods of Computation of Index Numbers Unweighted index numbers Weighted index numbers 15.4 Tests for Adequacy of Index Number Formulae 15.5 Cost of Living Index Numbers of Consumer Price Index Utility of consumer price index numbers Assumptions of cost of living index number Steps in construction of cost of living index numbers 15.6 Methods of Constructing Consumer Price Index Aggregate expenditure method Family budget method Weight average of price relatives 15.7 Limitations of Index Numbers 15.8 Utility and Importance of Index Numbers 15.9 Summary 15.10 Terminal Questions 15.11 Answers to SAQs and TQs Answers to Self Assessment Questions Answers to Terminal Questions 15.12 References
15.1 Introduction
In the unit 14, ‘Time Series Analysis’, you have studied about the definition and components of time series. You have also studied about different forecasting methods using time series analysis. In this unit 15, ‘Index
Sikkim Manipal University Page No. 360
Statistics for Management
Unit 15
Numbers’, we will discuss about the meaning and definition of index numbers, the types of indices along with examples. You will also study about different kinds of index numbers. Finally, you will study about the limitations of index numbers. We know that most values change and therefore we may want to know how much change has taken place over a period of time. For example, we may want to know how much the prices of different items essential to a household have increased or decreased so that necessary adjustments can be made in the monthly budget. However, while price of a few items may have increased, others may have decreased over a given period of time.
References: Richard I. Levin, David S. Rubin, (2008) Statistics for Management, Seventh Edition, PHI Learning Private Limited S. C. Gupta, Fundamentals of Statistics, 2008, Himalaya Publishing House U K Srivastava, G V Shenoy, S C Sharma, Quantitative Techniques for Management Decisions, Second edition, New Age International ––––––––––––––––––––– Sikkim Manipal University Page No. 383