The formula line type of an item determines how the item is handled during master planning and

batch order production. The Active line type indicates that the item is an active ingredient that has a

variable quantity and a fixed potency. The Compensating line type indicates that the item is used to

adjust the total quantity of the formula to a fixed amount1.

In this scenario, ProductA is the primary ingredient and ProductB is used to adjust the concentration

of active ingredients in the lotion. Therefore, ProductA should have the Active line type and ProductB

should have the Compensating line type. ProductC represents the remainder, so it can have any line

type except Active or Compensating1.

Setting the formula line type of ProductB to Active or ProductA to Compensating would not ensure

that the lotion final product has a consistent concentration of anti-inflammatory agents. Setting the

formula line type of ProductC to None would have no effect on the concentration of active

ingredients in the lotion1.