Start with something familiar
Think of paying rent with money that reaches your bank after the payment date. The month’s total income may be enough, yet the account still cannot make the earlier payment. A promise that cash will arrive is useful information but not cash available now. Bottle receipts work in the same way. A weekly total can hide a Tuesday shortage and a Friday surplus, so place both the need and the receipt on a calendar before declaring the plan covered.
Words to know: Backlog, Usable receipt, Pegging.
Set a within-period sequence
The baseline ten-unit receipt is usable before demand, which is why it reduces the 29-unit requirement. Change that timing and the arithmetic at the demand event changes. If all 57 units are needed Tuesday but the ten arrive Friday, only 18 are available Tuesday. The event-date requirement is 39, even though the week-end net requirement is still 29.
A weekly bucket is a compression of events. It works when the events inside it do not change a decision. When a delivery is close to a customer cutoff, split the bucket into days or named events. Explicitly state whether receipts happen before shipments on the same date. Avoid letting spreadsheet column order silently decide who is late.
Choose one carry-forward method
In a signed-balance table, next balance equals prior balance plus usable receipts minus new demand. A shortage remains negative until later supply clears it. In a physical-stock table, compute shipments as the minimum of available stock and total open demand, then show nonnegative ending stock and nonnegative backlog separately. The two methods can agree when used consistently.
Suppose Monday begins with eight bottles, receives none, and owes twelve. Physical stock ends at zero and backlog at four. Tuesday receives ten and has six new demand. Ten serves four backlog plus six new, leaving zero stock and zero backlog. The signed view moves from minus four to zero. Subtracting Tuesday’s backlog again in that signed view would create a false shortage of four.
Use timing evidence
Maintain requested date, supplier promised date, dispatch date, arrival date, inspection release, and customer cutoff separately when they affect decisions. An arrival scan is not always usable inventory. A supplier’s promise is a forecast about supply, so tag confidence and last confirmation rather than treating every open order as certain.
Timing exceptions need a specific response. State the units at risk, earliest useful receipt date, and decision deadline. Moving a purchase order earlier on paper does not shorten a real process. In the lab, build both carry methods and compare totals. This creates an independent check that is more valuable than simply repeating the same formula in a second cell.
- Define units and event
- Reconcile eligible inputs
- Apply the stated rule
- Check feasibility
- Explain the decision
Northstar worked decision
All quantities and costs below are fictional and self-contained. Apply the stated timing and unit conventions.
| Input | Value |
|---|---|
| Monday opening | 8 |
| Monday demand | 12 |
| Tuesday receipt before demand | 10 |
| Tuesday new demand | 6 |
- 1. Monday ships min(8,12) = 8 and carries backlog 4.
- 2. Tuesday open demand = 4 + 6 = 10.
- 3. Tuesday ships 10 and ends with stock 0, backlog 0.
Signed balances for Monday and Tuesday are -4 and 0.
Assumptions
- Use only the quantities and timing stated; no hidden receipts, losses, or substitutions.
- Fractional mathematical results are rounded only where whole-unit or pack rules are explicitly stated.
Where this can fail: This is a transparent teaching model. Confirm calendars, data definitions, and operating constraints before using an analogous policy in practice.
Build, test and explain a plan
Build a five-day event ledger. Opening stock eight, no initial backlog; daily new demand 12, 6, 9, 5, 8; before-demand receipts 0, 10, 6, 12, 2. Use FIFO backlog service, no losses, no planned extra receipts. Show signed balance and physical stock/backlog side by side. The eight-hour allocation is a self-paced estimate, not experimentally validated; it includes model building, scenario testing, a memo, and teach-back.
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 reading and make a one-page definition sheet. Mark every unit, date convention, and inclusion rule. Explain the difference between the policy input and the outcome being measured. |
| 0.5 | Recalculate the worked example independently, without copying the displayed result. Show intermediate arithmetic and reconcile the answer to the physical story. Note one assumption that could change the decision. |
| 3 | Build a reusable multi-period spreadsheet from the supplied lab data. Build a five-day event ledger. Opening stock eight, no initial backlog; daily new demand 12, 6, 9, 5, 8; before-demand receipts 0, 10, 6, 12, 2. Use FIFO backlog service, no losses, no planned extra receipts. Show signed balance and physical stock/backlog side by side. Keep inputs separate from formulas, add a clear output table, and include a check column that flags any quantity or timing inconsistency. Walk through the first and last rows manually. |
| 2 | Create separate named scenario tabs. Move Thursday receipt twelve to Friday before demand; separately move Tuesday receipt after Tuesday demand. Compare on-time units by original due day, not just final backlog. Preserve the baseline and record both changed inputs and changed outputs. Explain any outcome that stays the same, since a binding constraint or a measurement rule can make an intervention ineffective. |
| 1 | Write a 400-word decision memo naming your recommended action, evidence, assumptions, responsible role, and next check. Compare at least two alternatives using your table. State one limitation that could reverse the recommendation and what additional evidence would resolve it. |
| 1 | Teach the result aloud in five minutes using an original diagram. Then review every formula, answer the module questions relevant to this lesson, and write a short correction log. Use the remaining time to reproduce the key calculation from a blank sheet. |
Your deliverables
- An auditable multi-period workbook with baseline and named stress cases.
- A decision memo with numerical evidence and explicit limitations.
- An original explanatory diagram and a correction log.
Check your practice work
- Signed balances for Monday and Tuesday are -4 and 0.
- Physical ending stock is zero on both days; backlog is four then zero.
- Moving Tuesday receipt after demand makes six new plus four old units late at that event.
- Base signed daily balances are -4, 0, -3, 4, -2. Physical stock is 0, 0, 0, 4, 0; backlog is 4, 0, 3, 0, 2.
- Base on-time units by original due day are 8, 6, 6, 5, 6: total 31 of 40. Moving Thursday receipt to Friday gives 8, 6, 6, 0, 6: total 26; final backlog remains two.
- Moving Tuesday receipt after Tuesday demand gives on-time units 8, 0, 6, 5, 6: total 25; end-of-day balances match the baseline.
Keep these three ideas
- Build dated balances and show how late receipts change service even when totals match.
- Keep the unit, timing, and denominator visible.
- Treat model outputs as conditional on their stated assumptions.
Common mistakes
- Changing an input definition without changing all affected formulas.
- Presenting an expected or proposed quantity as confirmed usable supply.
Optional video study
Build dated balances and show how late receipts change service even when totals match.
- Set a within-period sequence
- Choose one carry-forward method
- Use timing evidence
Second half: application, contrasting scenario, and handoff.
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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