Material type & cannot be used with item category & (plant &)

What causes this issue?

You want to enter a new component with material type &V1& and item
category &V2&.
Settings in the IMG for production (Master data -> BOM -> Item data ->
Define item categories) determine that inventory management for this
item category is to be based on quantity.
However, other settings in the IMG for material type &V1& in plant &V3&
determine that the quantities are not updated in the material master.
This means that you cannot enter this material with item category &V2&.

How to fix this error?

Please check your entry for the item category.
You can enter item category <LS>non-stock item</> (no inventory
management) for the following materials:
material with a material type that supports <LS>configuration</>
<ZH>pipeline material</>, which can be taken from a pipeline at any
time
If you must enter this material with item category &V2&, consult the
department responsible for maintaining item categories and materials
management. The settings may need to be checked.

Error message extract from SAP system. Copyright SAP SE.