Price Index

Spend & Analytics

Definition

A published measure tracking price changes for a commodity or category over time.

Explanation

Price indices (e.g. for metals, fuel or paper) let buyers understand and anticipate market movements, and underpin index-linked contracts where prices adjust automatically with the index rather than by negotiation.

Example

The supply contract ties resin pricing to a published polymer index, adjusting quarterly.

Related terms

Benchmarking — Comparing prices, costs or performance against internal history, peers or the market to judge competitiveness.
Index-Linked Pricing — A contract pricing mechanism where the price moves automatically with a published index rather than by renegotiation.
Cost Breakdown — An itemised disclosure of the components that make up a supplier's price, such as materials, labour, freight, overhead and margin.
Spend Analysis — The process of collecting, cleaning, classifying and analysing purchasing data to understand what an organisation buys, from whom and for how much.

Frequently Asked Questions

What is Price Index?

A published measure tracking price changes for a commodity or category over time. Price indices (e.g. for metals, fuel or paper) let buyers understand and anticipate market movements, and underpin index-linked contracts where prices adjust automatically with the index rather than by negotiation.

Can you give an example of Price Index?

The supply contract ties resin pricing to a published polymer index, adjusting quarterly.

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