The inventory is created once you install Database or used for upgrades and patches. two kind of oracle inventory one called central inventory per server and another one called local inventory for each ORACLE_HOME, the difference between each of them central inventory basically contains a high-level list of components installed on the server. It is updated each time components are installed or uninstalled but it does not have detailed information such as the patch level of each ORACLE_HOME. on another hand local inventory contains some component information included with patch-level information.
another different is The Central Inventory contains the information related to all Oracle products installed on a host. and consists of a file called inventory.xml, which lists all the Oracle Homes installed on the node.