Yield and Scrap

Yield and scrap represent percentages that are built into a bill's structure to accurately forecast the production of finished goods and the quantities of components necessary to produce them. Yield and scrap percentages can be used together or independently. The yield percentage is collectively applied to all components of a bill. Because the yield percentage applies directly to the bill's parent item, it is applied against all components and charges used to manufacture the finished product. The scrap percentage is used for individual components. Although one yield percentage is applied to a complete bill, a variety of scrap percentages can be applied to components within the same bill.

Yield Percentages

The following table illustrates the use of the yield percentages when calculating the production quantities required to manufacture a specified number of finished products. In the following examples, F represents the desired final yield of finished products, Y represents the yield percentage, and Qp represents the required quantity to be produced to achieve the desired yield of finished products.

Final Product Yield	Yield %	Calculation		(Adjusted) Qty to Produce
F	Y	F / Y	=	Qp
1.00	90.00	1 / .90	=	1.11
10.00	90.00	10.00 / .90	=	11.11
500.00	90.00	500 / .90	=	555.56

The component and parent items represented in this example do not use units of measure defined by the Integer Units of Measure field in Bill of Materials Options. Integer Units of Measure values such as EACH round to the next whole unit. For more information, see Rounding Yield and Scrap Calculations.

Using scrap percentages allows great flexibility during manufacturing because the percentages are applied on a component-by-component basis.

The Bill of Materials tasks listed below use the yield percentage to calculate required production quantities.

Component Requirement Report: Parent item quantities are always factored by the yield percentage.
Costed Bill of Materials Report: Yield percentage is used to factor quantities when selecting this report for individual bill configurations.
Gross Requirements Report: Parent item quantities are always factored by the yield percentage.
Picking Sheet Printing: The parent quantity of each bill entered is factored by the yield percentage to arrive at the quantity-to-produce figure.
Production Entry: The parent quantity of each bill entered is factored by the yield percentage to arrive at the quantity-produced figure.
Cost Roll-Up Register: The parent quantity of each bill entered is factored using the yield percentage to arrive at the cost of each bill.

Scrap Percentages

The scrap percentage applies to a bill's component items and is used to increase the calculated gross requirements of specific component items to compensate for anticipated losses during the manufacturing process. For example, assume that 8" x 12" sheets of cardboard are used to manufacture photo mounts. To fill an order for an 8" x 10" photo mount, a sheet will have to be cut, leaving an 8" x 2" scrap. The scrap is 2/12 or 17 percent of the original sheet. For this particular bill of materials, a scrap percentage of 17 percent must be entered to accurately estimate the quantity of raw materials necessary.

Because the scrap percentage is entered into each bill using Bill of Materials Maintenance (instead of Item Maintenance), you can compensate for variances in the scrap rate unique to specific bills.

The following table illustrates the use of scrap percentages when calculating the gross requirements needed to manufacture a specified number of parent assemblies. In these examples, C represents the final component quantity used during production, S represents the scrap percentage, and Qb represents the gross component quantity per bill requirements.

Component Qty per Bill	Scrap %	Calculation		(Adjusted) Qty per Bill
C	S	C / 1 - S	=	Qb
1.00	10.00	1.00 / (1 - 10/100)	=	1.11
1.25	10.00	1.25 / (1 - 10/100)	=	1.39
500.00	10.00	500 / (1 - 10/100)	=	555.56

The component and parent items represented in this example do not use units of measure that are defined in the Integer Units of Measure field in Bill of Materials Options. Integer Units of Measure values such as EACH, round to the next whole unit. For more information, see Rounding Yield and Scrap Calculations.

Using scrap percentages allows for greater flexibility when forecasting component requirements during manufacturing because the percentages are applied on a component-by-component basis.

The Bill of Materials tasks listed below use the scrap percentage to factor anticipated requirements.

Component Requirement Report: Component item quantities are factored using scrap percentages during the component requirement calculation.
Gross Requirements Report: Component item quantities are factored using scrap percentages during the component requirement calculation.
Production Entry: Component item issues, including scrap percentages, are used during the component requirement calculation.
Cost Roll-Up Register: Component item costs are factored using scrap percentages during the component requirement calculation.
Costed Bill of Materials: Component item quantities are factored using scrap percentage.

Note If Indented is selected in the Format field in the Component Requirement Report, the scrap percentage is not included in the calculation.

Combined Yield and Scrap Percentages

Yield and scrap percentages are cumulative. For example, if an assembly has a yield percentage of 90 percent, and it contains a component with a scrap percentage of 10 percent, both percentages are used to calculate the total required production quantities.

Assume that the bill of materials represents 10 finished products. The parent item has a 90 percent yield percentage, and the components have varying scrap percentages.

You must first compensate for the yield percentage by calculating an adjusted quantity to produce. To accomplish this, divide the total quantity of products to be produced by the yield percentage. In this example, divide 10 by .90. The resulting adjusted quantity to produce is 11.11. This quantity is then used to determine the total component quantity required to produce the 10 finished products. To illustrate, each line in the following example represents a different component.

(Adjusted) Quantity to Produce	Component Quantity per Bill	Scrap %	Calculation		Total Component Qty Req'd
Qp	C	S	Qp x C / (1 -S)	=	T
11.11	1.00	5.00	11.11 x 1.00 / (1 - 5/100)	=	11.69
11.11	2.50	25.00	11.11 x 2.50 / (1 - 25/100)	=	37.03
11.11	3.00	0.00	11.11 x 3.00 / (1 - 0)	=	33.33

The component and parent items in this example do not use units of measure defined in the Integer Units of Measure field in Bill of Materials Options.

Rounding Yield and Scrap Calculations

If the Integer Units of Measure field in Bill of Materials Options includes the unit of measure applied to the parent item and/or any of the component items used, fractional quantities for those items are rounded to the next whole unit at each step of the calculation.

The following tables illustrate the cumulative effect of rounding on a single bill using both the yield and scrap percentage calculations.

Quantity to Produce (Qp) Calculation:

Final Product Yield	Yield %	Calculation	Round Parent?		(Adjusted Quantity to Produce
F	Y	F/Y	Yes/No	=	Qp
10.00	90.00	10/.90	N	=	11.11
10.00	90.00	0/.90	Y	=	12.00

Quantity per Bill (Qb) Calculation:

Component Quantity per Bill	Scrap %	Calculation	Round Component?		(Adjusted) Quantity per Bill
C	S	C/(1-S)	Yes/No	=	Qb
2.5	30.00	2.5/(1 - 30/100)	N	=	3.57
2.5	30.00	2.5/(1 - 30/100)	Y	=	4.00

Total Component Quantity Required (Qt) Calculation:

Round Parent?	(Adjusted) Qty to Produce	Round Com-ponent?	(Adjusted Qty per Bill	Calculation		Total Component Qty Req'd
Yes/No	Qp	Yes/No	Qb	Qp x Qb	=	Qt
Y	12.00	Y	4.00	12.00 x 4.00	=	48.00
Y	12.00	N	3.57	12.00 x 3.57	=	42.84
N	11.11	Y	4.00	11.11 x 4.00	=	45.00
N	11.11	N	3.57	11.11 x 3.57	=	39.67

The following 3 reports only round extended quantities based on the selection made in the Round Extended Quantity for Integer Units of Measure field.

Component Requirement Report: When the Round Extended Quantity for Integer Units of Measure check box is selected, the Parent Quantity to Produce and Component Quantity Required will be rounded to the next whole unit at each step of the calculation.
Costed Bill of Materials Report: When the Round Extended Quantity for Integer Units of Measure check box is selected, the Parent Quantity to Produce will be rounded to the next whole unit.
Gross Requirements Report: When the Round Extended Quantity for Integer Units of Measure check box is selected, the Parent Quantity to Produce and Component Quantity Required will be rounded to the next whole unit at each step of the calculation.