A circular bill of material (BOM) reflects an item that has been defined as a component of itself, whether it is a first-level component or a lower-level component. 

Currently, Dynamics 365 does not support Circular BOMs, as the functionality poses a high risk for incorrect cost calculations. When a circular BOM exists, cost roll up calculations and planning calculations will identify the error, and the calculations will not be completed.

However, circular BOMs is a common practice for many organizations, especially in specific industries where product structures rely on interconnected or iterative components.

We request that Microsoft consider addressing Circular BOMs into Dynamics 365 as a standard feature, ensuring the system can handle such configurations without posing risks to cost calculations or planning processes. Robust mechanisms should be implemented to safeguard against false cost calculations while allowing organizations to use Circular BOMs effectively and efficiently.

This enhancement would enable businesses to accurately reflect their operational requirements in the system, improving the overall usability and relevance of Dynamics 365 for diverse scenarios.