The book, put to work
Test the decision
before the commitment.
Compare a buyer’s cash case, a limited partner budget and a difficult collection month. Change one assumption, calculate, then explain what your result depends on.
The Delta Parts and A–G examples are fictional teaching cases from the book. The three partner profiles below are new, generic examples, not book forecasts. All amounts are illustrative US dollars, before tax. These are planning models, not promises. Money results are rounded to the nearest cent.
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Decision 01 · Chapter 6
Would Delta buy AI or better search?
Faster work creates capacity. It creates a cash saving only if an existing paid expense really falls. Compare both options over the same 12 full operating months after installation.
Formula and reading the result
Released hours per month = enquiries × eligible use share × (current minutes − option minutes) ÷ 60.
Paid hours removed = the smaller of released hours × removable share, or existing removable paid-cover hours. Cash benefit = paid hours removed × hourly cost × 12.
Complete additional cost = supplier price + customer preparation + 12 × monthly upkeep. Cash difference = paid cover avoided − complete additional cost. Current-process costs are the baseline; zero means no change.
The handling times include checking and correction. Both options must use the same approved sources and meet quality and access requirements. A person still checks each reply and makes any parts-compatibility decision.
At the book defaults, AI costs $46,800, avoids $54,000 and leaves $7,200. Search costs $22,800, avoids $27,000 and leaves $4,200. At 50% use, the cash differences are −$10,800 and −$4,800. The added paid-cover cap is 100 hours per month in this site example.
Confirm the paid-cover records and test that the hours can end without shifting work to other staff. More capacity alone is not a cash saving.
Decision 02 · Partner planning
What fits a limited partner budget?
Choose among three illustrative partners for one 12-month planning period. Every opportunity has the entered probability of becoming an accepted new customer during that period. Count each opportunity once, with no overlap between partners.
Contribution per win means customer revenue less direct delivery costs in this period, before the investment and success award entered here. It is not ARR. Fixed investment and vendor hours are spent whether or not a customer wins. An award is paid only for an accepted new customer.
Formula and limits
Expected wins = opportunities × success probability. Expected net contribution = expected wins × (contribution per win − award per win) − fixed cash investment − specialist hours × hourly value.
Reserved planning budget = fixed cash investment + specialist hours × hourly value + opportunities × award per win. It reserves every possible award, not only the expected awards. The budget includes valued internal time, so it is not a bank-cash forecast.
Selected partners must fit both the reserved planning budget and the specialist-hour limit. Zero-win cost = fixed cash investment + specialist hours × hourly value; no success awards are paid in that case.
The defaults are separate website examples. Keep the same definition of an accepted new customer for the probability, contribution and award. Include all relevant direct delivery costs in the contribution estimate. Additional overhead, tax and cash timing are outside this model. Do not count the same opportunity in two profiles.
Decision 03 · A–G annual case
Can the business reach the collection date?
The book’s A–G practice receives $134,000 and pays $132,000 during the year. With $15,000 opening cash, it closes at $17,000. Move one receipt and see the cash position on the way there.
Formula and fixed cash schedule
Monthly closing cash = opening cash for the month + receipts − cash paid. The next month starts with that closing balance. The temporary funding gap is the amount needed to lift the lowest negative month-end balance to zero, before fees or a buffer.
January has no receipts because there are no opening receivables. April and October each include a $6,000 deployment receipt. December’s $13,000 service invoice stays unpaid at year-end. These assumptions are fixed here; this tool changes opening cash and one receipt date only.
Zero delay amount or the same original and new month means no delay. A positive delayed receipt can move only to the same or a later month in this year. Moving a receipt beyond December is outside this model.
At the defaults, the base minimum is $3,000 in March. Moving $10,000 from February to April produces −$7,000 in March and a $7,000 temporary gap, while year-end cash stays $17,000.
Take the reasoning to a real discussion.
Write down which input needs evidence, who will check it and the date you will review the decision.