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Thanks very much for response Mahendra
No, I cleared all the stock before I create order. But I found some thing strange upon further testing.
I created another new item, and copied the same bill of material as the existing item. In this case it was not eligible for supply.
Let me explain about bill of material.
When I create bill of material for new item for testing purpose a while ago, it was having only 3 components all of them are purchased items
Existing item has few make Items, Phontoms, reference etc. Would this cause problem?