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Blog · Coverage and territory · Industrial distributors

Lost lines on ten order lines: the whole arithmetic on one page

The complete lost-line calculation on ten order lines from three accounts at one branch, small enough to check by hand: the order and fulfilment exports joined on order and line, each line's state, shipped in full, short, cancelled for stock, or substituted, lost value at the line's price, lost rate per account, the item that recurs, the account whose order frequency fell after the run, and the assertion that every line is in exactly one state, so a reader can reproduce every figure and then run it on their own exports.

By CoviragePublished 17 September 20263 min read
The short answerTen order lines at one branch, joined to the fulfilment export on order and line. Six shipped in full, one short, two cancelled for stock, one substituted. Lost value is the quantity not supplied as ordered times the line price: $2,940 across four lines, three of them on one item. Per account, the lost rate is lost lines over order lines; account 2 lost three of four lines in a fortnight and its orders per week fell from two to one in the eight weeks after. Every line is in one state and the four states sum to ten. Every number can be reproduced by hand.

Lost lines are a join of two exports and a state per line, and on ten lines it can be done by hand. This page works the join, the states, the lost value, the recurrence, the account effect and the assertion.

The orders and the fulfilment

Line Account Item Ordered Price Shipped Reason State
1 1 K-1 40 $25 40 In full
2 1 K-2 10 $80 10 In full
3 2 K-3 20 $45 0 Stock Cancelled for stock
4 2 K-1 30 $25 30 In full
5 2 K-3 15 $45 0; K-3B shipped Substituted Substituted
6 2 K-4 12 $60 8 Stock Short
7 3 K-3 24 $45 0 none; stock was 0 on order date Cancelled for stock, inferred
8 3 K-5 6 $120 6 In full
9 3 K-1 50 $25 50 In full
10 1 K-4 5 $60 5 In full

The assertion

lines = in full + short + cancelled + substituted = 6 + 1 + 2 + 1 = 10

Lost value

Lost value = quantity not supplied as ordered × line price

Line State Not supplied Price Lost value
3 Cancelled 20 $45 $900
5 Substituted 15 $45 $675 (revenue kept on K-3B; listed as substitution)
6 Short 4 $60 $240
7 Cancelled 24 $45 $1,080
Total $2,895; $2,220 cancelled and short, $675 substituted

Per account

Account Order lines Lost lines Lost rate Lost value
1 3 0 0% $0
2 4 3 75% $1,815
3 3 1 33% $1,080

The recurring item

Item Lost lines Accounts Periods with lost lines, trailing 6
K-3 3 2 5 of 6

K-3 is short every month. That is a stocking decision with $2,655 a fortnight on this page and more on the year.

The account effect

Account Orders per week, 8 weeks before the run 8 weeks after Effect
2 2.0 1.0 0.5

Account 2 halved its order frequency after three lost lines in a fortnight. Its revenue is still on the sales report, smaller.

Where it goes wrong, even at ten

Fulfilment never joined. The branch knows three cancellations; nobody knows they were all account 2.

Substitution ignored. Line 5 reads as fulfilled; account 2's run reads as two lines.

Valued at cost. $2,895 at price is the demand turned away; at cost it understates it.

Line 7 dropped for lack of a reason. K-3's recurrence reads 4 of 6.

From ten to ten thousand

The same join and state per line, per branch, item and account, with recurrence and the frequency effect. Covirage runs it on the order and fulfilment exports every month. The lost lines guide covers the measure, and the inventory ageing guide covers the stock that could have been K-3.

Questions people ask

Is a substitution lost?

Partly. The revenue moved to another item; the customer did not get what they asked for. Substitutions are their own state, valued at the ordered line's price for the list, and reported separately from cancellations. Account 2's substitution is on its run.

Where does the reason come from?

The fulfilment export's reason code on cancelled lines. Where there is none, a cancelled line on an item with zero stock on the order date is inferred as a stock cancellation, labelled. Line 7 is inferred here.

How is the frequency effect measured?

Orders per week for the account in the eight weeks after the last lost line against the eight before. Account 2 went from two a week to one. It is an association, and it is the reason the branch manager calls.

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