You'll need some additional tables and relationships in order to manage production as well as to update inventory.
You'll need what's known as a BOM--a bill of materials. This will be a related table linked to each inventory item that is a manufactured item. The related records need to list the ID's and the quantities to produce one unit of product (One little red wagon in your example).
Then you'll need a table that logs your production runs--On shift A of 08/20/2012, produced 300 little red wagons.
Then a script can use the BOM for the Little Red wagon inventory item to generate the needed transaction records to put 300 little red wagons into inventory and to remove the needed quantities of materials from inventory.
Thank you for the reply