To make arrows, potions and armor, go to the workshop in your house.
As with the inventory, your companion, Eloimaya, needs to be close to you. Otherwise, you can only use the items in the chest. And the result of the crafting will go into the chest too.
The green zone allows you to switch between the inventory and the chest.
To make something, drag-and-drop items from the cyan zone to the red zone.
If a recipe exists with the combination of items, it will appear in the blue zone.