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Index Year Contract: easy document editing

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In statistics relating to national economies, the indexation of contracts also called “index linking” and “contract escalation” is a procedure when a contract includes a periodic adjustment to the prices paid for the contract provisions based on the level of a nominated price index.
The Consumer Price Index (CPI) measures the average change in the prices paid for a market basket of goods and services. Escalation agreements often use the CPI the most widely used measure of price change to adjust payments for changes in prices.
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in February on a seasonally adjusted basis, the same increase as in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment.
What goods and services are included in CPI? Food and Beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks) Housing (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture) Clothes (men's shirts and sweaters, women's dresses, jewelry)
Step #1: Get the 12-month rate of inflation from the Consumer Price Index (CPI). Step #2: Convert the percentage to a decimal by dividing the rate by 100 (2% = 2 ÷ 100 = 0.02). Step #3: Add one to the result from Step #2 (1 + 0.02 = 1.02).
By definition, Index Based Pricing is the use of a market or raw material index (or group of indices) to calculate and regularly refresh prices. It helped suppliers protect their margins in volatile markets, reduced hassling negotiations and offered a transparent pricing mechanism.
The cost index describes cost changes caused to entrepreneurs from acquisition of inputs for a contract or an assignment. Cost indices are sometimes also referred to as input indices. The cost index describes changes in prices of cost factors relative to the selected base year.

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