Start with something familiar
A group outing needs seats, meals, and tickets. Having thirty-two meals does not help if only twenty-four seats are available and the group cannot travel without them. Once the smallest limit is known, asking every team to work harder is wasteful. You need a specific way to add seats or reduce the group. Supply planning similarly distinguishes the desired output from what all linked stages can jointly provide by the required time.
Words to know: Net requirement, Allocation, Usable receipt.
Find the constraint in the same unit
Northstar needs twenty-nine additional good bottles after stock and receipts are netted. For this simplified supply-stage comparison, supplier availability supports twenty-four good bottles, manufacturing supports thirty-two, and shipping supports thirty. Each quantity is stated as good-bottle equivalents available before the cutoff. The feasible increment is the minimum, twenty-four, leaving a five-unit shortage.
Do not add capacities across consecutive stages. They constrain the same flow. Also do not compare raw component pieces with finished good bottles without a conversion. This case deliberately provides equivalent units; a later yield model must use starts and expected good units separately. An increase at a nonbinding stage does not necessarily change delivery.
Separate confirmed and possible recovery
Option A is a confirmed alternate source of five usable good bottles before cutoff for a $25 fixed fee plus $2 premium per bottle. Its incremental cost is $35 and it closes the five-unit shortage. Option B offers eight units after cutoff for a $16 fee. It can help recovery but cannot meet the original service event.
A buyer should ask for quantity, usable date, approval status, and expiry of the quote. An unqualified source is not a confirmed option. Record quality release or substitution approval as a dependency. If management chooses to wait, state which customers remain exposed and when they will receive the next update, rather than changing the plan to imply certainty.
Track milestones and residual risk
An exception log is most useful when each row has an owner, next evidence date, and decision deadline. For example, a carrier booking can be confirmed today while inspection remains pending tomorrow. A plan can therefore have partially reduced risk without being fully secured. Keep those distinctions visible in the handoff.
Stress the recovery itself. If the alternate supplies only three before cutoff, the remaining shortage is two. If shipping falls to twenty-seven after adding five supplier units, only twenty-seven can pass the chain and the shortage becomes two. Recheck all stages after each intervention; the bottleneck can move when an improvement is successful.
- 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 |
|---|---|
| Net good-bottle need | 29 |
| Supplier good-equivalent cap | 24 |
| Manufacturing good-equivalent cap | 32 |
| Shipping good-equivalent cap | 30 |
- 1. Feasible incremental flow = min(24,32,30) = 24.
- 2. Shortfall = 29 - 24 = 5.
- 3. Alternate cost = 25 + 2 × 5 = $35; new flow min(29,32,30) = 29.
Baseline shortage is five good bottles.
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 four weekly rows. Good-bottle net needs are 29, 35, 26, 31. Supplier caps are 24, 30, 30, 28; manufacturing caps 32, 34, 28, 35; shipping caps 30, 33, 27, 30. No carryover in this isolated weekly exercise. Alternate supply can add up to five good bottles/week before cutoff for a $25 fee in each week used plus $2/unit. 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 four weekly rows. Good-bottle net needs are 29, 35, 26, 31. Supplier caps are 24, 30, 30, 28; manufacturing caps 32, 34, 28, 35; shipping caps 30, 33, 27, 30. No carryover in this isolated weekly exercise. Alternate supply can add up to five good bottles/week before cutoff for a $25 fee in each week used plus $2/unit. 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. Compare no recovery, the minimum alternate supply required to maximize feasible shipments, and a shipping reduction of three in every week. Only order alternate units that can pass the downstream caps. 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
- Baseline shortage is five good bottles.
- Three alternate units leave two short.
- After five alternate units, a shipping cap of twenty-seven leaves two short.
- Without recovery weekly flows are 24,30,26,28 and shortages 5,5,0,3.
- Useful alternate quantities 5,3,0,2 give flows 29,33,26,30 and shortages 0,2,0,1. Fees total$75 plus$20 premiums=$95. Manufacturing and shipping cap week 2 at 33.
- With shipping reduced by three, baseline flows 24,30,24,27; useful alternate quantities 3,0,0,0 give flows 27,30,24,27. Shortages 2,5,2,4 remain; cost$31.
Keep these three ideas
- Identify the binding constraint and quantify recovery alternatives.
- 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
Identify the binding constraint and quantify recovery alternatives.
- Find the constraint in the same unit
- Separate confirmed and possible recovery
- Track milestones and residual risk
First half: foundation and first worked check.
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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