Monday, 25 August 2008

Produce by-Products as raw material / finished goods

Generally, manufacturing process will consume certain amounts of raw materials in order to produce one unit of finished good. In other words, manufacturing process will reduce raw material inventory and increase finished good inventory.

However, in some manufacturing process, by-products will also be produced while producing the finished goods. The by-products can be another finished good or can be recycled back as raw material. Thus, it will increase the finished good / raw material inventory. You can cater this kind of situation in Navision by consuming the by-products as negative quantity in production order. When the production journal is posted, the negative consumption will positive to raw material / finished inventory and negative out WIP inventory.

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