A Bill of Material can be set up for a finished goods (FG) item that is a product of consumed raw material- and ingredient items and the effort of various resources.
As a unit of the FG item is produced, estimated consumption of BOM components can be automatically posted to the production lot, and thus decreased from inventory.
All BOM components can have a defined Unit Cost, and therefore the Unit Cost of the FG item can be calculated as the sum of all the BOM components required to produce the FG item. The accuracy of the BOM component quantity requirement specified in the BOM affects how close to actual consumption the automatic consumption posting becomes and how realistically the Unit Cost of the FG product is valued.
The next chapters will describe the use of Wisefish BOMs.