Kitting
The Kitting System allows you to handle “kits” or groups of items that are sold or bundled together as one unit. Kits consist of multiple parts which are separate inventory items but which are sold under a common “kit” part number.
Kit items do not require actual assembly in the Shop Floor System but are items that are “kitted” or built “on the fly” during the picking and invoicing process. The top level item for a kit does not actually exist and the kit item is used mainly to speed up data entry and to describe the actual components that are represented by the kit. Kit items should have an on hand quantity of zero since they are built on the fly and then immediately deducted from stock by the Invoicing/Order Completion process.
Kit items are handled in a unique manner by the inventory control system. When a sales order is entered into the system for the Kitted part (the top level kit item), the system will reserve the components for the kit based on the total quantity of the kit part that is being ordered. The system will then allocate the component items (the actual items that are included in the kit) to the order line only when ALL components are available for the item to be shipped. In other words, it will allocate based on the number of whole kits that can be shipped out to the customer.
This option allows you flexibility when handling scarce components. If the component part can be used to build the top level item, and the other components are available, the system automatically allocates the kit components so that they can be shipped to the customer that is waiting for the kit. If all components of the kit are not available, the components are reserved, but they are not allocated to the order, so that the components can be sold individually as the component part.
More:
Kit Top Level and Component Item Setup