Compute chain Index numbers with 1986 prices as base from the following table giving the average wholesale price of the commodities A,B,C for years 1987 to 1990

Question: Compute chain Index numbers with 1986 prices as base from the following table giving the average wholesale price of the commodities A,B,C for years 1987 to 1990

Commodities19861987198819891990
A2016283521
B2530243645
C2025302430

Solution:

Commodity19861987198819891990
A10016/20*100=8028/16*100=17535/28*100=12521/35*100=60
B10030/25*100=12024/30*100=8036/24*100=15045/36*100=125
C10025/20*100=12530/25*100=12524/30*100=8030/24*100=125
Total of link relatives300325375355310
Average100108.33125118.33103.33
Chain Relatives100108.33*100/100 =108.33125*108.33/100 =135.41118.33*135.41/100 =160.23103.33*160.23/100 =165.5
Computation of Chain indicies