UPDATE:
I believe I have found something that could be the issue. When I check this item's availability by location, I see one line with a proper location code, and another line with the qty of 40 I want placed into a blank location. I only have one location set up which is SLC.
When I try to create a transfer order, I cannot select the blank location as it is not a real location. Is there another way to transfer inventory from a 'blank' location to a proper one?
__________________________________________________________________________________________________________________________________________________________________________________________________
I am creating a production order for a certain item. This item has many components. The line highlighted is the one giving me problems.

Below is the item ledger entries for the above item, totaling to an on hand quantity of 41:
I go to Related -> Other ->Item Tracking Lines to select lot numbers to allocate to this order. I then go to Select Entries and here I have a list of the available lot #s to choose from. Here I only see two lot #s with a total quantity of 1, but the item has an on hand quantity of 41. I am missing the available 40.
If I go to the item ledger entry for the line referring to the output of the 40, I see that it was a production order and I have an untracked quantity of 40.
Also, that quantity of 40, was from the below finished production order.
And when I go to the item tracking lines in this finished order, I see that it does have an assigned lot?
How can I make this qty of 40 be available to me to select in the above production order? Is the problem that I just don't have a lot assigned to those 40 quantities? If so, what is the proper way to assign a lot and if I cannot, what else should one do in this situation? The item is lot tracked, but it does not have a Lot No. Series attached. Will creating one and adding it to the item also help prevent this in the future?
Let me know if you need any more information and I can add it in an edit.
Thank you very much.