Inflation measured at the final consumer level embeds all the price changes in its supply chain. Price changes in the supply chain convey information of the balance between supply (level of production) and demand (quantity sought by purchasers) at early stages in the supply chain. Reducing inflation for consumers means addressing issues earlier in the supply chain.

Inflation is measured as the volatility of prices facing final consumers. It is measured as changes in the Consumer Price Index (CPI) and is the popular headline in the news media. Central bankers use the Personal Consumption Expenditure Price Index (PCEPI) the inflation target. The difference is the CPI focuses on a specified basket of consumer goods while the PCEPI is calculated for all consumer expenditures.

To reach the consumer level, raw materials such as the output of mines, farms or fisheries are fabricated into products for use by the industries that produce and distribute the final product to the consumer. In the capitalist system, prices convey information about imbalances between supply and demand that will influence investors where to invest their funds,

Statistics Canada monitors prices along the supply chain.

As described by Statistics Canada the Resource Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. It includes all charges purchasers incur to bring a commodity to the establishment gate, including transportation charges, net taxes paid, and customs duties and tariffs paid on imported raw materials. Many of the prices measured by the RMPI are set on the world market. The monthly price movements of 51 individual products are monitored and reported in Statistics Canada.

Moving upstream along the supply chain, raw materials are fabricated into products for use by the next level of the supply chain. As described by Statistics Canada the Industrial Products Price Index (IPPI) reflects the prices that producers in Canada receive as goods leave the factory gate. The IPPI does not reflect what the consumer pays. The IPPI excludes indirect taxes, such as sales taxes and tariffs, and all costs that occur between the time a good leaves the plant and the time the final user takes possession of the good. This includes transportation, wholesale and retail costs. The IPPI does not measure the direct effect of tariffs on prices, tariffs may indirectly influence prices measured in the IPPI. For example, inputs used in the production process that are imported and on which Canada imposes a tariff may raise the prices charged by Canadian producers. Tariffs on Canadian imports or exports may also indirectly influence prices in the IPPI through their impact on supply and demand dynamics.

The Industrial Product Price Index is comprehensive.

Each month, about 3,600 price quotes, from about 1,100 producers, are used in the calculation of the IPPI. The prices collected are for goods sold at the factory gate. As a result, the prices covered by the IPPI refer not to what a purchaser pays, but to what the producer receives. They exclude all indirect taxes, such as sales taxes and tariffs as this money does not go to the factors of production (i.e. labour, capital, or profit). They also exclude any transportation service performed by a common carrier beyond the factory gate and any distribution services performed by the retail or wholesale trade industries.

Moving upstream again the Statistics Canada monitors prices paid by consumers for the final product. Retailers add a number of charges on top of the industrial price. Charges include a markup for profit, marketing, packaging, branding, distribution and retail overhead.

The final consumer price embeds all prices changes from earlier stages of the supply chain.

Identifying bottlenecks in the supply chain that increase costs (for example increased exploration for rare earth minerals, or invest to improve transportation and distribution systems) will incentivize private sector investors to address the issue provided they have jurisdictional access.