Kerf Offset is used to make minor adjustments to the excess material removed due to width of laser beam. Kerf (refers to the thickness or width of a cut made by a cutting tool) is dependent on type of material, focus, cut settings etc. and needs to be adjusted for each material if you are making close fitting parts.
Kerf offset
For example, cut a square (20mm x 20mm) and rectangle (25mm x 45mm) in the material of your choice. Measure if you are getting repeatable tolerances on each axis.
If you are getting repeatable tolerances which are close / equivalent to the laser beam diameter of your laser cutter on both axis, you can directly use Kerf Offset to accommodate for the same.
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