| # Scrap and yield In manufacturing processes it is often necessary to plan the production for more of a product than you actually need, because some of the product may be outside specification. Some of the components can also break or be unsuitable for production. This effect can be modeled by means of scrap and yield. The scrap and the yield are taken into account in the following situations: Exploding bills of material. Cost accounting. Estimating material requirements and hours for production orders. Reporting operations and orders completed. There are two levels on which scrap and yield can be applied: BOM-line level On BOM-line level, scrap may be defined as a fixed quantity or a percentage. Operation level On the operational level, scrap can be defined as a fixed quantity, and yield can be defined as a percentage. The fixed scrap quantity is seen as a loss during input of the process. Yield defined on the operation level means that only a percentage of the gross input will result in output after the operation is finished. The scrap quantity and yield percentage on the operation level influence planned materials and hours. Note Subcontracting operations can also have scrap and yield, in that case subcontracting costs are calculated based on the quantity of the planned output of an operation. Related topics Estimated and actual material costs Scrap Yield Defining scrap and yield Calculating estimated quantity Rejects of production orders |