rework and reuse of components

Hello,

I have following scenario , need your views and guidance for configuring the same.

We are using production orders. The process has got rejections. Rejected materials are moved to repair area.The components which can be reused, are taken back to production.If the rejection is because of machine defect, the same is scrapped , else the product is sent back to vendors.

Large amount of machine scrap is generated during operation, is collected and sold out.

Please let me know the consideration used for configuring the above scenario.