How to scrap the defective units in Quarantine order in Microsoft Dynamics 365 F&SCM.

Let's imagine the following scenario: 

The company has 6 units of the Surface Pro 128 GB that is under inspection in quarantine zone. Quality inspector finds out that 2 of them are defective and need to be scrapped. What are the steps to perform this operation in Microsoft Dynamics 365 F&SCM?

Create Quarantine order for 6 pieces of the Surface Pro 128 GB (Inventory management > Periodic tasks > Quality management > Quarantine orders).

Quarantine order status is Created.

Notice that inventory transactions with the reference Quarantine order will be created:

Issue status is On order from the main warehouse

Receipt status is Ordered to the Quarantine warehouse

Start the order inspection by clicking Start button. Quarantine order status is Started.

Notice that inventory transactions with the reference Quarantine order will be updated:

Issue status is Deducted from the main warehouse

Receipt status is Received to the Quarantine warehouse

Issue status is Reserved physical from the quarantine warehouse

Receipt status is Ordered to the main warehouse

From Quarantine order, select Split function

Enter a split quantity of 2

Notice that new quarantine order of 2 units is created. Status and transactions are inherited from the parent order.

Select the Scrap function

Enter a scrap quantity. 

Notice that inventory transactions with the reference Quarantine order will be updated:

Issue status is Sold from the main warehouse

Receipt status is Purchased to the Quarantine warehouse

Issue status is Sold from the quarantine warehouse

Receipt transaction to the main warehouse is removed.

Quarantine order status is Ended.

End the order inspection by clicking End button for the 4 units. Quarantine order status is Ended.

Notice that inventory transactions with the reference Quarantine order will be updated:

Issue status is Sold from the main warehouse

Receipt status is Purchased to the Quarantine warehouse

Issue status is Sold from the quarantine warehouse

Receipt status is Purchased to the main warehouse