What do you mean by Assembly scrap and how is it maintained in SAP?

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.