DATA ANALYSIS NISSAN

1. Part C
Factors Weight Mexico City Weight Columbia, SC
Political risk 0.25 70 17.5 0.25 80 20
Transportation
cost
0.20 40 8 0.20 90 18
Labor
productivity
0.20 85 17 0.20 75 15
Rental cost 0.15 90 13.5 0.15 55 8.25
Labor cost 0.10 80 8 0.10 50 5
Taxes 0.10 90 9 0.10 50 5
73 71.25
From the table above, Columbia SC is the best location based on the calculation of the weight
against points awarded by different factors that is 71.25 as compared to that of Mexico City
which is 73. Although, Mexico City has favorable condition with regard to political risk and
transportation cost but it has higher points in all the remaining factors as compared to Columbia
SC.
Part D
Item Annual
Demand
Cost/Unit Demand X
Cost
%of total Rank
I5 1750 10 17,500 1.6% 8
D1 6000 10 60,000 5.5% 5
A2 3000 50 150,000 13.8% 3
E9 1000 20 20,000 1.8% 7
J8 2500 5 12,500 1.1% 9
C7 1500 45 67,500 6.2% 4
B8 4000 12 48,000 4.4% 6
G2 300 1500 450,000 41.4% 1
H2 600 20 12000 1.1% 10
F3 500 500 250,000 23% 2
Total 1,087,500

2. From the table and graph above, the ABC classification of items above is;
Classification Items
A items G2, F3 and A2
B items C7, D1, and B8
C items E9, I5, J8 and H2
According to Pareto law, 20% of the items should have a total of 70% value to be classified as A
items, 30% of the items having a total value of 25% to be classified as B items and 50% of the
items having a total value of 5% to be classified as C items. In this case, A items accounts for
30% of the items and a value of 78.2%, B items accounts for 30% of the items and a value of
16.1% and C items accounts for 40% of the items and a value of 5.7%.
For proper inventory management, the company should focus on class B items in that, some of
the items in class A have high value and therefore should be balanced so that they don’t have to
have high reorder level.