Business One in Action - What is

the Effect of ‘Rejecting’ a

Manufactured Item in the ‘Receipt
from Production’ function?

Applies to:
SAP Business One, General Logistics , Stock, Production

Summary:
This article details how manufactured items, which are rejected for example due to quality control, are
handled by SAP Business One.
Author: Noreen Armstrong, Senior Support Consultant, GSC, SAP Business One
Company: SAP
Created on: May 2010
Author Bio:
Noreen Armstrong joined SAP in 2004 and is currently active as Senior Support Consultant for SAP
Business One. She has worked as both technical and business consultant. She authored this article as a
direct response to a partner enquiry during the Expert-on-Phone project, where she consulted on mainly
logistics and administrative related topics.

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

Table of Content
What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ Function? ................... 3
Related Contents .......................................................................................................................................... 8
Copyright ...................................................................................................................................................... 9

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from

Production’ Function?
The options Complete and Reject available in the Type field of the Receipt from Production are informational
only.

The selection made in the Type column does not have any impact on the journal entries of the Receipt from
Production transaction or the way the stock is dealt with. When a receipt transaction is posted, SAP
Business One always increases the quantity of the produced item regardless of whether the Type field
shows Complete or Reject.
Consider the following scenario where a production item (ICE_C001) has an In Stock quantity of 15 units:

Production Order no.123 is created for the parent item ICE_C001 having a Planned Quantity of 5. When
completing the production of this item, only 3 of the 5 are accepted by the Quality Assurance (QA)
department and 2 are rejected. To reflect this in the Receipt from Production, 2 lines are entered for the
production order. In line 1 the Quantity field shows the figure 3 and the Type field shows the value Complete.
Line 2 shows the same item from the same production order, order no. 123, with a Quantity of 2 and a Type
of rejected and the Warehouse is set to 02. In this scenario we have put the rejected stock into a separate

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

warehouse to make it easier to manage these items and ensure that they cannot be used accidentally in
other transactions.

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

Once posted, the In Stock quantity for warehouse 01 is increased to 18 and for warehouse 02 is increased to
2, giving a total stock of 20.

There are two possible methods which can be used to remove the rejected items from the In Stock quantity:
1. Use stock transactions such as Goods Issue or Stock Posting to reduce the quantity in the warehouse
holding the rejected stock. This is typically used when the parent item is discarded and the components
cannot be reused. In this example a Goods Issue function from the Inventory -> Inventory Transactions
is used to reduce the stock in warehouse 02 by 2:

The item now no longer has stock in warehouse 2 and the stock in warehouse 01 is still 18, as expected.

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

2. Use the ‘Disassembly’ Type Production Order when you need to decrease the parent but the
components are reusable:

Once issued or disassembled (The Report Completion opens an Issue for Production in a
Disassembly type Production Order), the In Stock quantity of the produced item, ICE_C001, reduces
by the Planned Quantity in the Production Order in the specified warehouse. In this example the
quantity in warehouse 02 is reduced by 2 giving the same result as seen with the goods issue
function in point 1.
In a Disassembly production order the related components’ quantities are also increased, by their
Planned Quantities, as a result of the return of these components into stock. In this example,
component items E_001, C_001 and F_001 are all automatically increased by their planned

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

quantities, 10,6 and 0.5 respectively, when the Report Completion is added for the planned quantity
of 2 for the parent item ICE_C001.

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

Related Contents
 SAP Business One in Action Catalog Page
 Link to DRC documentation
 For more information, visit the Business One homepage.

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 Business One in Action - What is the Effect of ‘Rejecting’ a Manufactured Item in the ‘Receipt from Production’ function?

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