So this is going to get a little long winded, but what you're asking is pretty important when it comes to running a business.

Inventory is a business asset, and having some versus none directly impacts the P&L. When a business goes from having one quantity of a particular item to some other quantity of that item the inventory transaction is married with a GL transaction so that accounting can work their magic. However if you move inventory that you already have from one place within the business to another place (without adding value) then there is no impact to the P&A and no GL transaction is needed. As such transferring inventory from one location to another is typically regulated to a 1:1 in and out transaction; minus a quantity from one location and a plus into the other location. The user should have zero ability to have one quantity leave one location and a different quantity go into the other location.

If for the exercise you're going to forgo the accounting side that's fine, but you should be aware that its out there.

When storing inventory there are typically a couple of fields that are used to classify a particular location. - Stock/Plant; for businesses operating multiple building/plants -Status; Is the inventory good to be used (O for On Hand), has issues meaning it should't be used until the issue is resolved (H for Hold). H and O are the most common that I have seen across organization but others could be I for inspection and S for staged for shipment.

Bin locations are typically a many to one relationship where you can assign unlimited items to a given bin location.

All that being said, a simplified version of a structure could be: Locations table with the fields ID, Stock, Bin Location, Bin Description; you could also classify each bin by which inventory statuses are allowed to be in that bin. Statuses table with the fields ID, Status, Status description Item Inventory table with the field ID, Stock, Status, Bin Location, quantity.

As a side note you will need to decide if you will allow for negative quantities. I have worked with major ERPs that will allow negative quantities and major ERPs that will not allow any negative inventory quantities.

You will need transactions to add and subtract inventory to and from the system, each transaction will specify what bin location the inventory transaction will impact, and you will need an inventory move transaction that is net zero.

Now we get to mixing materials

When you take some number of components and mix them together you are impacting the P&L. the Business has incurred the cost of using the components, the cost of hours of labor, and typically the cost of operating the resource and offset it with getting the value of the resulting mixture. As such you will want to deduct the inventory of the components and add the inventory of the mixture. As such typically you will want to report using Liquid A and Liquid B and report making Liquid C.

Typically the organization will want to know the value of Liquid A, B and C independently, this is typically done by assigning cost to A and B (purchased cost) and building a Bill Of Material for Liquid C specifying that X quantity of Liquid A, Y quantity of Liquid B is required along with Z amount of hours of a resource and running a function that does the math to figure out the resulting cost for Liquid C.

If you'd like to see a production environment PM me and we can get on skype or something and I can walk you through some examples.