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: Planned receipt, Planned release.
Define the planning boundary
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.
Calculate with explicit rules
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.
Check before committing
This exercise uses fixed lead times and no capacity constraint. That makes the table a useful material logic model, but not a fully feasible schedule. A machine conflict or a supplier delay can move the parent start and therefore move child needs. Recompute dependent requirements after the parent plan changes.
Check the balance equation in every period, then check the whole horizon. Opening stock plus all receipts minus all requirements must equal closing stock. This catches many indexing errors. It does not prove that every receipt is realistic, so also inspect the earliest release and the source of each scheduled receipt.
- 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 | Seal gross requirements weeks1–4:[20,36,24,30]. Opening usable seals14. Scheduled receipt12 in week2 only. |
| 2 | Lot-for-lot; lead time1 week; zero safety stock; all receipts before same-week consumption. |
- 1. Week1 shortage=20−14=6; projected end0.
- 2. Week2 shortage=36−12=24; weeks3,4 need24,30.
- 3. Planned receipts[6,24,24,30] map to releases in weeks0,1,2,3.
Base planned receipts total84;14+12+84−110=0.
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. Seal gross requirements weeks1–4:[20,36,24,30]. Opening usable seals14. Scheduled receipt12 in week2 only. Lot-for-lot; lead time1 week; zero safety stock; all receipts before same-week consumption. 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 | Construct the full table with gross, scheduled, opening, net, planned receipt, ending balance, and releases. Then create a two-seal parent-start row [10,18,12,15] that reconciles to gross requirements. 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 | Test lead time2 weeks; separately move scheduled receipt12 from week2 to week3. 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 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.
Keep these three ideas
- Offset component needs and planned receipts with explicit lead times.
- 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
Offset component needs and planned receipts with explicit lead times.
- Material requirements planning turns a dated need into dated supply proposals
- Week1 shortage=20−14=6; projected end0.
- Base planned receipts total84;14+12+84−110=0.
Second half: scenario comparison and decision.
Open the module media & quizPut this idea to use
Carry your assumptions into a practical tool, then compare your result with a short guide.
Open a related planning toolRead the related planning guidePractice with the planning gameThis saves a completion marker in this browser only. It does not verify time spent.