How to use Negative Stocks and its purpose

Please advise me, how to use negative stocks. Mainly for what purpose this
concept is used.
What settings are required to do for mainaining negative stock.
Negative stocks can be utilized for a number of different business scenarios, for
instance:
1. If a material shipment is going to a customer, but the production has not yet
confirmed (and there is not enough stock on hand to satisfy the requirement), instead
of getting the "deficit of stock..." message when doing the issue for the delivery, the
system will allow you to issue the material, and your inventory will show a negative
quantity until the production confirmation is
performed.
2. I had a client who used this functionality to track component usage for their
subcontractors. They would confirm production for an entire month for the FERT
materials produced by the subcontractor. Starting the month with zero stock for all
components, then at the end of the month the value of the component stock
(disregarding the negative sign) would be deducted from the amount they owed for
the services performed. In this agreement, the components were "sold" to the
subcontractor but no invoicing ever took place for the components. Just a word of
caution ...negative stocks/values for materials can raise many questions for accounting
purposes at the end of fiscal periods.
There have been several reasons for using the negative stock functionality subject to
the specific business requirements of your industry. For us, we have decided to use
this negative stock feature due to the following reasons:
1) Sales of finished products to customers. We are cement producer and in an effort to
avoid any delay in selling our products to our customers, we determined to allow
negative stock posting since it is of our cement industry that cement after being
packed will be delivered directly to our customers ie. no temporary storage is
required.
2) The alignment of inventory/stock movement with production process where due to
some reason, the reception of raw materials and/or consumables was not maintained
on time resulting in interruption of process order confirmation.

Can someone tell me what is the effect of negative stocks in material valuation, ie.
moving average?
As you know negative stock will have negative value, which will have direct impact
to financials. Say you have a material of Qty 10 Each, total worth $ 10.00 in stock
and since you enabled negative stock in system ( valuation area level and plantstorage location level ) if you try to issue stock of say 20 Eaches, system will show
stock of negative 10 and value $-10.00.
After that if you try to do goods receipt of say 20 eaches, of total value 20.00 material
will have original status as you started. But if the value is different say 25.00, then
moving average will be arrived from $15.
Why my stock is having negative stock value. The stock qty is 0. When I want to
do GR, the system issue and error message saying my stock is negative. How can
I do bypass it.
My assumption was that you are using MAP (Moving Average Price) Price Control
for your material and that there was a price difference between IR value and GR value
where IR value < PO value. In this case, the price difference will be credited to your
stock and since the price difference value is in excess of your current stock value, this
negative value took place.
Example
1000 pieces of a material are delivered. Due to lack of time, the goods receipt is not yet entered in the
system.
Physical stock: +1000 pieces
Book inventory balance: 0 pieces
The material is needed urgently and 100 pieces are withdrawn from the warehouse. The goods issue is
entered in the system straightaway.
Physical stock: +900 pieces
Book inventory balance: -100 pieces
At the end of the day, a goods receipt is posted for 1000 pieces.
Physical stock: +900 pieces
Book inventory balance: +900 pieces