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Commerce 365 for Magento automatically synchronizes your Business Central inventory data. In Magento there are mainly  two ways of handling inventory. The standard configuration is Single Source. This means that you only have what Magento calls the Default Source. And with this setup your system holds one single inventory value per product.  

Multi Source Inventory (MSI) means that you have multiple sources, which all have their own inventory values. 

The default configuration within Commerce 365 for Magento is Single Source. This means when calculating inventory, we take the sum of all available inventory (inventory - qty on sales order) and that will be sent to Magento's default source. 

Additionally you can apply location filtering by going to the general setup card, and add filters under Catalog > Inventory Location Filter

If you want to make use of Multi Source Inventory (MSI), go to Locations and click on Create Magento Location. On the next screen you can add further details per location, and there is a Enabled switch. Once Enabled and Released, the location will be created in Magento. And, from that moment on, inventory calculation will be split into a calculation per locations. 

Be aware that switching to inventory calculation per location also affects the inventory values for the Default Source. When no locations are active, the inventory values for Default Source are the sum of all locations. When locations are activated, the Default Source contains the inventory values for Location '' (no code).  

Below is a screenshot of the Sources (Locations) as you can find the in the Magento back end once you start working with MSI. 

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