here's the basic scenario (NAV 2009 R2 Classic Client, we are heavily customized but I think this code is pretty much base NAV):
Sales Order is created. Warehouse Shipment is created, Source Document is set to the Sales Order.
A Pick is created - Because Quantity on Hand is 2, the Pick is for 2 items. Register the Pick, Post and Print.
Warehouse Shipment has 2 shipped, one outstanding (item back ordered for 1 because only 2 on-hand).
We need to cancel the outstanding quantity on the Warehouse Shipment and also the Sales Order (source document for the Warehouse Shipment). Is this possible?