How would The Business Edge handle the following?

We have items that we modify and sell as a different item. For instance we take a 12 foot piece of all thread rod that we cut into smaller pieces and sell as stud bolt instead of all thread rod. How does your system handle this so the all thread rod is removed from stock but the order to the customer show the stud bolts and the system know the cost of each stud based on the cost of the rod.