If we donot put the Scrap factor in the BOM and instead put ONLY in the Item master (for all components) in Baan IVc4 then I have 2 questions ...

1)Does the MRP plans for additional material by scrap factor %

2)Does it also work in the Supply chain side for same items (here Top level item ofcourse a MPS item).

Waiting....

1}MRP only sees the scrap factor on the BOM and does not see it on the Item Master.
2}Same as the answer above because MRP is the engine which passes the demand down and generates the schedules.

To test this simple put a scrap factor of 75% on an item master and 0 in the BOM line where this item is used and run MRP. see the results and then switch to have the item master 0 and BOM line 75%

Find out the average scrap factor of a material when used across all your finished good and record it in the material's item data.
Find out the usual scrap factor of a material when used to produce one particular finished good and record it in the BOM of that finished good.

Rgds,
Paul

When you create BOM, the scrap factor gets defaulted for the child item from Item Master and the planning engines and production orders (estimated material) consider the data from BOM.
So even if you change the scrap factor in BOM to "0", planning engines or sfc orders will not consider it (even if scrap factor is maintained in the item master)!