Fastenal, the largest fastener distributor in North America, procures an identical drive anchor from three independent suppliers

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Fastenal, the largest fastener distributor in North America, procures an identical drive anchor from three independent suppliers that differ in unit price and quantity supplied. The relevant data for 2016 and 2018 are given in the following table, where quantity and unit price are expressed in terms of packages of 10 anchors. 

Unit Price (S) Supplier Quantity 2016 2018 A 150 5.45 6.00 200 120 5.60 5.50 5.95 6.20 BC


a. Compute the price relatives for each of the component suppliers separately. Compare the price increases by the suppliers over the two-year period. 

b. Compute an unweighted aggregate price index for the component part in 2018. 

c. Compute a 2018 weighted aggregate price index for the component part. What is the interpretation of this index for Fastenal?

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Statistics For Business & Economics

ISBN: 9781337901062

14th Edition

Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran

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