It is not uncommon for manufacturing companies to have byproducts as the result of manufacturing.  In some cases, this is a different product that is produced and has a value; other times, it may be the same basic end item but of a different quality.  I have run into both of these situations.  One was a chemical company with a different byproduct, and the other was a cloth manufacturer where, upon completion, some of the finished material was of a sub-grade and could not be sold as the end item. Both of these situations can be managed by setting up a negative line in the Microsoft Dynamics NAV Bill of Materials.

Be careful when setting up a negative line, as you don’t normally want this to be flushed, but rather the result of a negative consumption entry within the NAV Manufacturing application.  Not only will you be able to record the receipt of the byproduct into inventory, but if you have an estimated quantity on the Bill of Materials, you will get visibility of the byproduct expected receipts.  If you are using standard cost, the cost of the byproduct will be removed from the production order and therefore the cost of the actual end item of the production order.

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