Supplier recovery and allocation

A shortage is not solved by a larger total in a spreadsheet. It is solved by goods that can pass each needed stage before the due time. Northstar needs twenty nine more good bottles. Its source can support twenty four, its factory thirty two, and its shipping team thirty. In this example all three limits are in good bottle equivalents and all apply before the same cutoff.

The flow can be only twenty four. We take the smallest limit, not the sum. More factory room does not help if parts for the extra units do not exist. More trucks do not help if the goods are not made. The gap to the need is five. Start there. Name the binding limit and the units at risk before asking every team for more work.

Now look at a recovery offer. An approved source can supply five good bottles before cutoff. It charges a fixed fee of twenty five dollars plus two dollars for each bottle. The extra cost is thirty five dollars. Add those five to the source limit and it reaches twenty nine. The factory can handle thirty two and shipping thirty, so twenty nine can pass the whole chain.

A second offer has eight bottles but they arrive after cutoff. That may clear a backlog later. It does not serve the original due time. An offer with no firm date is not the same as usable stock. Ask for the quantity, the usable date, the quality status, and when the quote ends. Those details turn a vague option into a decision that someone can act on.

Recheck all limits after a fix. If shipping falls to twenty seven, adding five source units no longer gives twenty nine shipped. The new cap is twenty seven. Only three extra source units improve shipments before cutoff. Their cost is thirty one dollars, and two units remain short. A sound plan makes the remaining gap visible. It does not keep paying for supply that cannot pass the next stage in time.

When supply is scarce, we also need a rule for who gets it. Take a separate case with twenty four bottles. Account A asks for eighteen and B asks for twelve, all due at the same time. Total need is thirty. A proportional rule gives each account the same share of its need before we round to whole bottles.

A's raw share is fourteen point four. B's is nine point six. Take the whole parts first: fourteen and nine. That uses twenty three bottles. Give the last bottle to the larger remainder, which belongs to B. The result is fourteen for A and ten for B. A waits for four, B waits for two, and the total gap is six.

An A first rule gives A all eighteen and leaves six for B. A has no gap, and B waits for six. Total shortage is still six. The math cannot tell us which policy is fair or right for the business. Contracts, agreed priorities, and service goals must guide that choice. The planner should show the effects clearly so a hidden formula does not make the policy by accident.

Link each allocated unit to the supply it uses and the demand it serves. That link is called pegging. If five bottles from one receipt are promised to A, those same five cannot also be promised to B. Keep allocated, unallocated, and shipped quantities separate. When the plan changes, check that the parts still sum to the available whole.

Your lab repeats these choices for several weeks. Compare both customer outcomes and total fill. Test a smaller supply amount and a minimum shipment size. Use a fixed tie rule when remainders match. Write down cases where the policy cannot fit the physical limits. Then propose a rule that can be carried out.

Finish with a short exception log. Name the gap, owner, next proof, and last time to decide. A supplier may confirm dispatch while the receipt check is still open. Show that risk as open. A clear handoff tells the next person what is firm, what is possible, and what still needs a choice.

Before closing the case, ask whether an extra unit can truly pass every stage. If one stage is full, more supply upstream may just wait. A useful recovery changes the customer outcome, not just the amount on an order.

1. Find the limit

   Three stage bars share one good-unit scale

   • Source 24
   • Factory 32
   • Shipping 30
2. Price recovery

   Five-unit option with fee and premium

   • Five timely
   • Cost 35
   • Gap closes
3. Recheck flow

   Shipping bar shortens to twenty-seven

   • New cap 27
   • Useful extra 3
   • Gap 2
4. Proportional split

   Twenty-four units split into two account bars

   • Raw 14.4/9.6
   • Largest remainder
   • Final 14/10
5. Priority choice

   Side-by-side customer shortage bars

   • A-first 18/6
   • Same total gap
   • Different effects
6. Keep promises traceable

   Receipt to demand links with owner card

   • Peg once
   • Record status
   • Next proof