CS repair with new item replacement

Hi,

We have this scenario and would like to know how we will handle using the repair process.

The customer returns an item for repair, and upon checking, the material cannot be repaired longer.

The material has to be scrapped and a replacement item will have to be send back to the customer.

Our process steps are:

1> Create Repair Order & PGR serviceable material.

2> Service Order created.

3> Scrap material (via MB1a/migo?)

4> Need to prepare new item for replacement.

     *How do we prodcue and PGR the new item?  Can it be done via the Service order? (IW32/IW41)?

          Or should we use PP Order? (to record service cost, parts used, etc..)

5> Ship replacement goods to customer

     *How do we send the replacement item? Can we use the same repair order#?

Please advise on items 4 & 5.