English to Arabic Tech/Engineering Engineering (general)

Indirect Costing Methods
Indexes & Trending
The indexes commonly used by valuers are sets of numbers measuring changes over time in the cost of assets, material, or labor.
Trending reflects the movement of price over time
Indexing is an indirect method of pricing (costing)
Index factors are applied to historical cost to estimate current cost
An index will derive reproduction cost and not replacement cost
An index is a reflection of the movement or price over time
Review of Common Terms Used With an Index
Base year:
An arbitrary starting point from which changes are measured (usually represented by 100)
Linking:
A means by which the transition is made between periods of different product definition, different product mixes or “market baskets,” or changes in a base year
Mean:
The arithmetic mean as an average
Median:
That number, or value, that divides the group into two equal parts (There are as many numbers above as below).
Mix:
The amount and types of items considered in an index
Mode:
That number, or value, that is represented most often in the distribution
Weighting:
The importance, or impact, made by each item used in an index
Understanding an Index
How many of you have used an index?
For what purpose?
Were you aware of how the index you used was derived?
Limitation of Indexes/Cautions
The purpose for which the index was developed
The weightings or the mix used in developing the index
Sometimes referred to as “the tool of last resort”
Replacement Cost Vs Reproduction Cost
Applying Indexes
Use Cost indices which are specific to the type of assets being valued
Understand how the index was developed
Know the mix within an index