MINI CASE: CAR RECALL DATA
UCL School of Management
MSIN0116 Business Strategy and Analytics
MINI CASE: CAR RECALL DATA1
INSTRUCTIONS: The mini case is to be completed and discussed during Lecture 2.
Every year, a large number of cars are recalled by the automobile firms due to safety reasons. In the U.S., all
car recall data is recorded and stored by National Highway Traffic Safety Administration (NHTSA), Department
of Transportation. This dataset is available to the public and contains all NHTSA safety-related defect and
compliance campaigns since 1967. The data is in text format with 89431 records. All the records are TAB
delimited, and all dates are in YYYYMMDD format. The data also includes 24 variables listed in the table below.
As a data analyst, you are interested in the car recalls related to Ford Focus and Honda Accord. To analyse the
data, please follow the steps below.
1. Download the car recall data from Moodle.
2. Convert the text file to a data file that you can analyse (i.e., Stata, SAS, Excel, SPSS or Python) .
3. For Ford Focus and Honda Accord respectively, find out how many records in the data set are related
to these two models.
4. For Ford Focus and Honda Accord respectively, how many of the recalls are initiated by the
manufacturer (MFR), Office of Vehicle Safety Compliance (OVSC) or Office of Defects Investigation
(ODI). Tabulate the results in a table with the frequency and percentage.
5. For Ford Focus and Honda Accord respectively, draw a bar chart to demonstrate the number of cars
that are affected for each model year. (Hint: use the variable “YEARTXT” and “POTAFF”)
In 2016, Vauxhall decided to recall all its Zafira B model in the UK, involving 234,938 cars manufactured from
2009 to 2014. The root cause behind this large recall is that, all affected cars used the same faulty thermal
fuse that may cause fire2. In fact, sharing the same component across different products is a common practice
in manufacturing industry. However, when the shared component fails, the firms have to recall a large number
of products, resulting in very high cost and negative impact on the firms’ public image.
6. Use the car recall data, verify that component sharing indeed exists. (Hint: you can create a new
variable called “sharing”, which counts how many different car models are using the same defective
component, then draw a histogram of “sharing”. You can also study how many cars are recalled for
each of the defective component.)
7. Briefly discuss the advantages and disadvantages of component sharing in the context of product
recalls (Word limit: 300). You can make use of the reference listed below.
1 Based on the car recall data downloaded in July 2011 from National Highway Traffic Safety Administration (NHTSA), Department of
Transportation, USA. This mini case can only be used in the class of MSIN0116 Business Strategy and Analytics at UCL. All right
reserved. Dr. Yufei Huang.
Davidson III, W.N. and Worrell, D.L., 1992. Research notes and communications: The effect of product recall
announcements on shareholder wealth. Strategic Management Journal, 13(6), pp.467-473.
Fisher, M., Ramdas, K. and Ulrich, K., 1999. Component sharing in the management of product variety: A study of
automotive braking systems. Management Science, 45(3), pp.297-315.
Haunschild, P.R. and Rhee, M., 2004. The role of volition in organizational learning: The case of automotive product
recalls. Management Science, 50(11), pp.1545-1560.
Oshri, I. and Newell, S., 2005. Component sharing in complex products and systems: challenges, solutions, and
practical implications. IEEE Transactions on Engineering Management, 52(4), pp.509-521.
Ramdas, K., Fisher, M. and Ulrich, K., 2003. Managing variety for assembled products: Modeling component systems
sharing. Manufacturing & Service Operations Management, 5(2), pp.142-156.
Ramdas, K. and Randall, T., 2008. Does component sharing help or hurt reliability? An empirical study in the
automotive industry. Management Science, 54(5), pp.922-938.
Rhee, M. and Haunschild, P.R., 2006. The liability of good reputation: A study of product recalls in the US automobile
industry. Organization Science, 17(1), pp.101-117.