Drop
The unusable remnant left when stock is cut into pieces, steel you paid full price for that never becomes parts, and a line the material price has to answer for.
The argument arrives when someone divides bar price by pieces per bar and gets a smaller material cost than the quote carries. The difference is the drop. A 12 foot bar does not divide evenly into 2.555 inch gross lengths, and the last piece of every bar is a remnant too short to run. It was bought at the same price per pound as the steel that became parts, so it belongs in the material line, and a quote that ignores it is understated on every piece by a predictable fraction.
At volume the drops are tonnage. A program running 1,200,000 pieces a year consumes thousands of bars, and the accumulated remnant is a real commodity with a real scrap value, which raises the second half of the argument. Whether scrap credit flows back into the piece price, stays with the floor, or gets shared, is a commercial choice, and the only wrong answer is not having made one, because a buyer’s should-cost model will make it for you.
Drop is also a lever, which is why it belongs in the takeoff rather than in a standard percentage. Gross length per piece is a decision, the parting method changes the kerf, and stock diameter is sometimes negotiable against what the mill actually stocks. A part redesigned or requoted 0.1 inch shorter on gross length saves nothing visible on one piece and a noticeable sum across a program. The worked material line in how to quote a machined part prices from gross length and names the remnant for exactly this reason.