TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
A price index (PIM) is a measure that tracks and measures changes in the price of specific goods in the production stages prior to the retail sale. Often expressed as a percentage or ratio, the PIM shows the overall included goods' average price change; it's often viewed as one indicator of how a country's economy is performing. For instance, if you were to visit a grocery store in Sweden, you would find that their grocery items cost significantly less than those in the United States. This is because the Swedish grocery stores are much more efficient with their production procedures, so they can sell their products for less.
If you were to use this information to determine the efficiency and growth of a certain country's economy, then you would also need to look at their political system, infrastructure, and their level of taxation. The political systems of many countries have been found to greatly affect the index's statistical data. Another way to compare economies using PIM is to determine their level of trade, or Purchasing Managers Index (PMI), which is based on Purchasing Managers Index (PMI).
The price index WPI or wholesale price index indicates how local producers manage the costs of their merchandise. Cost containment is a key issue for many wholesalers and manufacturers, which affects the industry as a whole. While a company's profit margin may be the most important factor in their profit margin, it should not be the only determining factor for the amount allocated to each item. Some nations use a combined form of the two indexes, called the producer price index or the PSI.
