Start with something familiar
Imagine planning a meal for a group of friends. You need to know who is coming, what each dish uses, which food is already usable, and when the oven is free. A full pantry does not help if the missing ingredient arrives after dinner. Nor does a long recipe prove that you can cook it before guests arrive. Manufacturing planning applies that same care to parts, unfinished work, available time, and the promises made to customers.
Words to know: Gross requirement, Net requirement.
Define the planning boundary
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.
Calculate with explicit rules
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.
Check before committing
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.
- Read case inputs
- Calculate the baseline
- Change one assumption
- Check and decide
Northstar worked case
All data below are fictional and complete for this calculation.
| Input group | Exact case data |
|---|---|
| 1 | Next-week demand51; separate prior backlog6; usable stock18; finished receipt10 before demand. |
| 2 | No safety stock, yield loss, lot size, or other demand in this example. |
- 1. Total due=51+6=57.
- 2. Eligible supply=18+10=28.
- 3. Net requirement=max(0,57−28)=29.
Base net requirements[29,26,25,26].
Assumptions
- Only the stated supply and demand exist; no hidden safety stock or open orders.
- Timing, yield, lot size, and setup follow the explicit case; do not import another lesson’s assumptions.
Where this can fail: This deliberately small model checks planning logic. It cannot establish supplier reliability, customer priority, or a statistical service guarantee.
Build, test and explain a plan
Northstar asks you to build a reusable planning model, not just report one answer. Use only the inputs below and the worked example. Next-week demand51; separate prior backlog6; usable stock18; finished receipt10 before demand. No safety stock, yield loss, lot size, or other demand in this example. Keep full precision in intermediate calculations and round only where the case requires whole units. Use separate tabs or clearly labeled paper grids for the baseline and each scenario. The eight hours are a self-paced practice estimate, not an experimentally validated duration.
Use paper or a spreadsheet. The estimates below include the study and worked example already on this page.
| Estimated hours | Activity |
|---|---|
| 0.5 | Study the terms and mark each input with its unit, date, and status. Write a half-page statement of the boundary of the model and list facts that are deliberately excluded. |
| 0.5 | Recalculate every worked-example step by hand. Compare the hand calculation with your model and explain any difference before moving on. |
| 3 | Build four independent weekly snapshots with demand[51,44,60,35],backlog[6,3,0,5],opening usable stock[18,12,20,8],timely receipt[10,9,15,6]. These are independent cases, not a rolling inventory series. Build formulas, a visible input table, and a reconciliation row. Add notes so another learner can reproduce the model without asking you for missing data. |
| 2 | For every snapshot test a late receipt and separately five additional held units removed from usable stock. Save each scenario separately. Compare quantities, dates, and any unresolved shortages. Trace the change from its input through every affected calculation. |
| 1 | Write a one-page decision memo naming the baseline result, the preferred action under each scenario, the remaining uncertainty, and the evidence required before execution. Do not invent costs or customer priorities. |
| 1 | Create a five-minute teach-back with one diagram and one checked number. Then use a second independent calculation to audit the model and revise unclear assumptions. |
Your deliverables
- An auditable input and calculation table with baseline and scenario tabs.
- A comparison table with numerical checks, dates, and unresolved gaps.
- A decision memo and a short teach-back using the supplied facts.
Check your practice work
- 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].
Keep these three ideas
- Separate demand, backlog, stock, and receipts before planning new supply.
- A numerical answer must retain its unit, timing, and assumptions.
- Use the scenario checks to test the model before using it to support a decision.
Common mistakes
- Combining values that refer to different dates or different physical units.
- Treating a modeled proposal or expected output as confirmed usable supply.
Optional video study
Separate demand, backlog, stock, and receipts before planning new supply.
- 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
- Total due=51+6=57.
- Base net requirements[29,26,25,26].
First half: definitions and baseline.
Open the module media & quizPut this idea to use
Carry your assumptions into a practical tool, then compare your result with a short guide.
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