# SMU MBA ASSIGNMENTS

## Information of sales price per unit of different commodities for two different years is given in following table-

December 02, 2017 By: Meliza Category: 1st SEM

1. Information of sales price per unit of different commodities for two different years is given in following table-
 Commodities 2010 2016 Price Quantity Price Quantity A 20 5 25 3 B 30 8 45 5 C 10 12 20 8 D 15 10 16 10 E 45 5 50 6 F 90 10 110 8

Construct the Price Index taking 2010 as the base year and 2016 as the current year by following methods.

1. Laspeyre’s Price Index
2. Paasche’s Method

iii.        Dorbish and Bowley’s method

1. Fisher’s Ideal Index Method

1. Construction of the Price Index
2. Laspeyre’s Price Index

Solution: Base year price and quantity are denoted by P0  and Q0  and current year price and quantity are denoted by P1 and Q1 respectively

 Commodity P0 Q0 P1 Q1 P0Q0 P1Q0 P0Q1 P1Q1 A 20 30 10 5 25 3 100 125 60 300 B 30 8 45 5 240 360 150 225 C 10 12 20 8 120 240 80 160 D 15 10 16 10 150 160 150 160 E 45 5 50 6 225 250 270 300 F 90 10 110 8 900 1100 720 880 Total 1735 2235 1430 2025

Laspeyre’s price index number is given by= LP01=EP1Q0/EP0Q0*100

Now substituting the values, we get,

LP01=2235/1735*100

LP01=128.818

Laspeyre’s quantity index number is given by= LQ01=EQ1P0/EQ0P0*100

LQ01=1430/1735*100

LQ01=82.42

1. Paasche’s Method

Paache’s Price Index is given by: PP01=EP1Q1/EP0Q1*100

PP01=2025/1430*100

PP01=141.60

Paache’s quantity index is given by: PQ01=EQ1P1/EQ0P1*100

PQ01=2025/2235*100

PQ01=90.60

iii.        Dorbish and Bowley’s method

DP01=(EP1Q0/EP0Q0+EP1Q1/EP0Q1)*100/2

DP01=(2235/1735+2025/1430)*100/2

DP01=270.4/2

DP01=135

1. Fisher’s Ideal Index Method

Fisher’s index number is given by= FP01=SQ ROOT OF (EP1Q0/EP0Q0 X EP1Q1/EP0Q1)*100/2

FP01=SQ ROOT OF (2235/1735 X 2025/1430)*100/2

FP01=SQ ROOT OF (1.288*1416)*100

FP01=SQ ROOT OF 18.2*100 =1820

FP01=42.66

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