WITH NewBOM AS

(

SELECT MODEL=COMPONENT_ITEM, [OPTION]=PARENT_ITEM

,[LEVEL], LEVEL_INDENTED, COMPONENT_ITEM, PARENT_ITEM, ITEM_TYPE

,[SORT]=CAST([LEVEL] AS VARCHAR(8000))

FROM SAMPLE_BOM

WHERE LEVEL = 0

UNION ALL

SELECT MODEL, [OPTION]=CASE b.[LEVEL] WHEN 2 THEN b.PARENT_ITEM ELSE [OPTION] END

,b.[LEVEL], b.LEVEL_INDENTED, b.COMPONENT_ITEM, b.PARENT_ITEM, b.ITEM_TYPE

,[SORT] + '/' + CAST(RTRIM(b.COMPONENT_ITEM) AS VARCHAR(8000))

FROM NewBOM a

JOIN SAMPLE_BOM b ON a.COMPONENT_ITEM = b.PARENT_ITEM

)

SELECT MODEL, [OPTION], [LEVEL], LEVEL_INDENTED, COMPONENT_ITEM, PARENT_ITEM, ITEM_TYPE, [SORT]

FROM NewBOM

WHERE [LEVEL] > 1

ORDER BY MODEL, [SORT];

You may need to play a bit with [SORT] to get the BOM displayed in exactly the order you want.