Can't install Mac OS Sierra to new virtual Machine

[jimolvera]

I am trying to setup a Sierra VM on VM Fusion 13.0.1. I've created a dmg of an installed Sierra OS and have scanned for restore in Apple Disk Utility. I begin the virtual machine setup and point it to the dmg. After saving the virtual machine, as Fusion starts running a yet to be installed (OS) virtual machine I get the dialogue box about no OS and pointing the CD/ROM to the dmg and setting Startup Disk to the CD. The virtual machine continually comes up with the same NO OS Installed dialogue, choose a disk image and startup disk. How do I get past this screen? I've been working on this for several hours with the same results each and every time. Thanks for your most prompt response. I've attached screenshots from About this Mac and the dialogue box about No OS installed.

[ColoradoMarmot]

So you just created a disk image of an installed machine?  That won't work - you need the actual installer from Apple to build the VM with the wizard.

[donnyh02]

So, one just points the CD/ROM to the OS installer downloaded from Apple?

[Technogeezer]

You don’t directly assign the installer app to the virtual CD/DVD. Select File > New in Fusion, then drag the macOS installer onto the Fusion New Virtual Machine dialog. Behind the scenes Fusion is building a bootable ISO from that installer app and assigning that to the virtual CD/DVD drive  

Alternatively you can build macOS installer physical media using procedures from Apple. Or build an ISO yourself from that installer app with a script you can find out on the web (apple doesn’t provide a process for building a bootable ISO like they do for physical media). I believe a script that does that has been referenced in this forum but I don’t have the link to ot off the top of my head.