How should you account for potential scrap of a high-value material during assembly?

Accounting for potential scrap of a high-value material during assembly is crucial for accurate cost management and inventory control. The correct approach involves setting the net indicator in the routing operation where the component is used. This methodology allows for a more precise calculation of material requirements throughout the assembly process.

By configuring the net indicator in the routing operation, you ensure that the system understands how much of the high-value material will be consumed during production, taking into consideration the expected scrap. This approach helps in optimizing the production planning process by providing a clear view of the actual material needs, ensuring that you allocate resources efficiently while minimizing waste.

Setting the net indicator directly in the routing operation aligns with best practices in production planning, as it reflects real production scenarios where scrap can occur at various stages of operation. This allows organizations to plan for and manage scrap effectively, ensuring that inventory and costs accurately reflect the reality of the assembly process.