Gross and net requirements across time

Begin with the question the plan must answer: how many additional usable bottles must exist before the next demand is due? Northstar expects fifty one bottles of next-week demand and has six older bottles still owed to customers. The backlog is separate from the forecast. Together they create fifty seven bottles of obligation. Eighteen usable bottles are already in stock. A receipt of ten finished bottles is due before demand. These are distinct supplies. Subtracting both leaves twenty nine bottles to obtain. This is a net finished-goods requirement, not yet a statement of machine starts or supplier orders. The next steps will convert the number into those other units. The phrase usable stock is a control, not decoration. Held, damaged, reserved-for-another-purpose, or unapproved stock may be physically present but unavailable to this plan. The exercise gives usable stock directly. In a live setting the planner must agree which status codes are allowed and confirm that the extraction time is consistent. A forecast and an order can describe the same need. If ten confirmed orders are already contained in a forecast of fifty one, adding the ten again creates false demand. The baseline forecast here already represents next-week demand, while the six-unit prior backlog is explicitly separate. Document that boundary before touching the formula. Negative arithmetic does not mean a negative production order. With more eligible supply than demand, set the new requirement to zero and carry the excess as projected stock. A useful spreadsheet keeps the raw balance visible and calculates the nonnegative shortage in another cell. That makes surplus and shortage easy to distinguish. Timing may reverse a conclusion that looks valid in total. A receipt arriving after the due date cannot cover that due date without a late promise. Do not quietly count it as timely supply. Show the gap, record the later arrival, and offer a recovery action that has an owner and a decision deadline. Material requirements planning turns a dated need into dated supply proposals. Start with the opening balance. Add scheduled receipts that arrive before consumption in the period. Subtract gross requirements. If the balance would fall below zero, propose enough supply to restore it to zero under the lot-for-lot rule used here. Keep scheduled receipts separate from planned receipts. A scheduled receipt is an existing order in the input data. A planned receipt is a proposal created by the calculation. Mixing them makes the next planning run difficult to audit and can cause a proposed order to be counted as if someone had already placed it. Use a consistent bucket convention. Northstar receives components at the start of a week and consumes them later in that week. A one-week lead time means a receipt in week three requires release in week two. Week zero is the week immediately before week one. A past-due release is an exception, not evidence that the calendar can be reversed. Component gross requirements follow parent starts. If the parent needs two seals, a thirty-unit parent release creates sixty seals of component need at that release date. It does not normally create the need at the later bottle shipment date. The distinction is essential when assembly itself takes time. Now pause and test the plan with your own hands. Draw a row for each week. Name the unit at the top of each row. Put the input in one place and the result in a new place. Keep a copy of the first plan. Change just one fact, then run the sums once more. Ask what moved, why it moved, and who must act. If a date is too late, say so. If a part is not there, show the gap. If a count is based on an average, do not call it a sure thing. A plan is useful when the next person can check it and act on it. Write a short note that states the need, the choice, the risk, and the next check. Read it out loud to a peer. Ask that peer to find one weak claim. Use the feedback to make the plan clear. Each number should have a unit, a time, and a source in the case. Each change should have a reason. Each open gap should have an owner. These habits help a small team see the same facts and make a sound choice.

1. The planning question

   Original card with the two lesson goals.

   • Separate demand, backlog, stock, and receipts before planning new supply.
   • Offset component needs and planned receipts with explicit lead times.
   • Northstar fictional case
2. Inputs and units

   Original table highlighting input quantities and dates.

   • Gross requirement
   • Net requirement
   • State timing
3. First calculation

   Original equation card showing the first worked case.

   • Base net requirements[29,26,25,26].
   • Late receipts produce[39,35,40,32].
   • Five units removed from usable stock produce[34,31,30,31].
4. Second calculation

   Original table showing the second worked case.

   • Base planned receipts total84;14+12+84−110=0.
   • Lead time2 leaves quantities unchanged but releases fall in weeks−1,0,1,2.
   • Late receipt scenario planned receipts[6,36,12,30],still84 total; timing changes materially.
5. Stress the plan

   Original side-by-side baseline and revised result cards.

   • Change one input
   • Recompute dependent rows
   • Expose the gap
6. Commit with evidence

   Original checklist with an owner and next review date.

   • Retain assumptions
   • Check the result
   • Name the next action