The scrap percentage is used to indicate the expected additional quantity of a component required to produce an item. Scrap is specified by component and is costed as:

Use scrap percentage carefully, especially on discrete items, since both Material Requirements Planning (MRP) and inventory backflush calculations use it. If you specify a 2% scrap rate on a discrete item—for example, an engine—and you have a requirement for 80 engines, the system calculates the demand quantity to be 81.6. To prevent decimal order quantities for discrete items, enter an order multiple in Item Planning Maintenance (1.4.7). Also note that component requirement and issue quantities are inflated when a scrap percentage is used.