Cost Index (or Price Index) is a method of adjusting or normalising costs over time to account for inflation or changes in market conditions that is a ratio of the cost of materials and services in one year to the cost in another year called the base year (the index for the base year is always 100). The Cost Index is used to compare and analyse cost data from different periods or locations accurately that represent the relative change in costs for specific categories of goods, services, or resources.
Related Definitions in the Project: The Project Cost; Cost Estimate (Estimation)
