The Zaragoza Auto Supply (ZAS) company is located in Zaragoza Spain near the largest

logistics hub in Europe (PLAZA) and one of the largest automobile manufacturing
plants.  ZAS provides replacement parts to various auto repair dealerships across the
state of Aragon and beyond.  The company has historically managed all of its parts in an
identical fashion.  However, a recent graduate of the Zaragoza Logistics Center (ZLC)
Master's Program has been hired to manage the supply chain.  She believes that the
parts should be segmented and has asked you to run an ABC analysis on a sample of 50
of ZAS's parts.

In the Excel file (w1pp6_ZaragozaAutoSupply_Data.xls), you will find the information you need
regarding the weekly sales volume, weekly sales standard deviation, unit cost, and unit
sales price for each SKU.  All currencies are in Euros.

1. Which SKU has the highest average weekly cost?

2. Which SKU has the highest average weekly revenue? Weekly revenue is defined as
AverageWeeklySales*UnitSalesPrice

3. Which SKU has the highest percent profit margin (profit/cost) per unit?

4. Which SKU has the highest average weekly profit? Profit is defined as
AverageWeeklySales*(UnitSalesPrice-UnitCost)

5. Which SKU has the most volatile demand in terms of coefficient of variation? The
coefficient of variation is defined as CV=σ/μ

You want to get a handle on how the A items might be distributed by total weekly
profitability.

6. What percentage of the total profit is contributed by the top 20% of the 50 SKUs (by
profit)?

7. What percentage of the total profit is contributed by the bottom 50% of the 50 SKUs, by
profitability?
 You believe that the fast moving, highly volatile SKUs should be managed separately with
more time spent on improving the forecasting capabilities. You select the criteria for fast
moving to be selling 50 or more units per week and the criteria for highly volatile as
having a CV greater than or equal to 0.50.

8. What percentage of the total profit is contributed by these Fast Moving AND Highly
Volatile SKUs (both criteria satisfied)?