WIP calculation priority must be higher than WIP cancellation priority

What causes this issue?

The priority of the status determines the sequence the system uses to
select a valuation method for WIP calculation.
You set the following priorities in the standard system:
Priority <ZH>1</> for the status <ZH>PREL</> (partially released)
Priority <ZH>1</> or <ZH>2</> for the status <ZH>REL</> (released)
Priority <ZH>2</> or <ZH>3</> for the status <ZH>DLV</> (delivered)
If the order has both status <ZH>DLV</> and status <ZH>REL</>, the
order is processed according to the method for status <ZH>DLV</>. The
work in process is canceled.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Change the priority.

Error message extract from SAP system. Copyright SAP SE.