A Data Flow Diagram (DFD) for an inventory management system is an abstract representation that outlines and visualizes the pathways and processes between data sources and destinations. It is also used to visualize how data is sequentially processed within a software system. DFD’s allow us to identify the source and destination of data and represent logical and physical components of the data flow and their relationships. They are used to map out the flow of data from external entities to the internal components of the system and the resulting output. DFD's also help developers better understand the scope, complexity, and granularity of software projects, enabling more effective design and development decisions.