WHEN IS AN INDEX NOT APPROPRIATE?
Care should be taken when using indexes. Of particular importance is to ensure the items being monitored do not somehow change over time. For instance, the production cost of an item may not have changed over time, yet in reality the size or the quality of the item may have decreased. For example, the diagram below illustrates the widget associated with the price index.
However it can be seen that in 2007 the widget produced was different from previous years, meaning the index value for 2007 is not necessarily comparable with those of the previous years.