A percentage factor that compensates for expected loss of a component during manufacturing by increasing the gross requirements. The scrap factor, entered on the Job Materials form, could contain a maximum decimal quantity of 0.9999. The scrap factor is job specific.
You can determine scrap factor by evaluating historical records that show the amount of scrap reported at the job item level. Use the Job Transactions Report to show historical scrap reported against specific jobs.
Various functions in the manufacturing modules use the scrap factor to calculate material requirements. The intent of the calculation is to arrive at a total quantity required that would result in the actual number of good pieces needed after expected scrap. The quantity required of the material is divided by (1 - scrap factor) to arrive at this number:
Total Qty Required = Qty Required / (1 - Scrap Factor)
For example, If you need to end up with a quantity of 100 which has a scrap factor of 20%, the resulting quantity required is 125 (100/ 1 - .2). If you then scrap 20% of the 125 issued, you end up with 100 good pieces (125 - (125 * .2)).
People often expect the system to simply multiply the scrap factor by the quantity needed and add the result to the quantity needed. That is, in the above example they expect the total required to be 120 (100 + (100 *.2). However, if you issued 120 pieces and scrapped 20%, you would end up with only 96 good pieces (120 - (120 * .2).