you are asking about 2 issues, the insufficient qty message is very likely caused by certain qty of that item has been allocated to other purchases such as other production order, sales etc. You need to find out what it is allocated to.
allocation is a rather complex topic in BC, BC has its logic allocating items and calculate available qty for an item
the second issue is likely that you need to create a warehouse pick and register it before consuming it from production journal.
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Jun Wang
