Assembly scrap is scrap that is expected to occur during the production of a material which is used as an assembly. If a certain amount of scrap always occurs during the production of an assembly, the quantities and activities used must be increased by the system so that the required lot size can be produced. To increase the lot size of an assembly you can enter a percentage, flatrate assembly scrap in the MRP 1 view of the material master record. This assembly scrap is reflected in all the subordinate components. The system increases the quantity to be produced by the calculated scrap quantity. This increases both the materials consumed and the activities consumed and consequently the cost.