Bills of material and work orders

Define what a finished good is made of, then build it — components out, finished goods in, cost carried across.

Inventory → BOM and Work orders.

A bill of material lists the components and quantities that make one finished good, plus any labour or overhead to absorb. BOMs nest: a sub-assembly can itself have a BOM, and the explosion resolves the whole tree.

A work order is one build. When you complete it:

• component stock is relieved at its FIFO cost,
• labour and overhead are absorbed at the rates on the BOM,
• the finished good is received into stock at the total.

Nothing is invented — the finished good's cost is the sum of what went into it.

Shortages: before you start, the work order shows what you do not have enough of and what it is waiting on.

Compare with [Bundles and kits](/docs/bundles): a bundle is a selling convenience that relieves components at the point of sale. A BOM produces a genuinely new item that is stocked and costed in its own right.