Accurate inventory is crucial to running your store.
If you add an option and specify the sku and number-in-stock, the store will use that sku and inventory in the shopping cart. The sku will show on the order and the inventory will be debited after the order ( if you have inventory turned on).
If you have multiple options, only one of the options can specify sku and inventory number. If you enter a sku on the second option it will be ignored.
The new Inventory tab allows you to generate a sku from two options. Example: The first option is colors and the second option is size. You can now create a sku like 'blue-lg'.
Inventory Builder