Page 357 - Aida Hovsepian Onboarding

b. Zeros cannot be a price result and must be deleted, otherwise it invalidates the average
price
8. PPI data can be revised for up to four months after initial release and consequently must be
updated every month up for the prior four respective months.
9. The most closely related individual PPI measure is assigned to each commodity.
a. The BLS thoroughly followed the North American Industry Classification System
(NAICS) and truly reports on every item accounted for in US manufacturing. Items are
often lumped together in categories, resulting in a dilution of the specific category
performance.
b. Classification of the MPPI items must following the same classification method as used
by the NAICS. This will result in the MPPI correlation to the PPI that includes the
specific market basket item.
c. The correlation may not seem accurate, but the respective PPI will contain and report
on all the transactions for the market basket item, even though it is pooled with other
related items in the performance reporting.
d. This leaves the correlation slightly less than perfect because of dilution.

MPPI Process

Requirements:
1. PPI Master Database
2. Apple Index

3. IHOP Index
4. Apple MPPI
5. IHOP MPPI

Background of the purpose of the MPPI, and processes that are impacted by this report.

Gather PPI data
The Bureau of Labor Statistics provides updated PPI data ~mid-month, and includes the prior
month’s data (run the PPI data mid-June to receive May data). CSCS updates the MPPI report monthly
upon retrieval of new PPI data. For a calendar of PPI release dates, access http://www.bls.gov/ppi/
for the “Schedule of Releases for the Producer Price Index”.

1) Open PPI Master Database for the calendar year that needs updating.
2) Click on “download list” tab. Copy highlighted cells.
3) Access the Bureau of Labor Statistics webpage
4) Select Data Tools/Series Report (screen shot below)

MPPI Process – Commodity Risk Management Page 4