To add or create sub category in Inventory, follow the steps given:
Step 1:
Select the Inventory module and then select Create Items under the Item Details menu.
(Inventory-->Item Details-->Create Items)
Step 2:
Select the Inventory Master option. Against the respective category, click on the +icon given.
Step 3:
Fill the details like Sub Category, Description, Minimum and Maximum stock then select the Reorder level.
Click on Save and Next. The Sub Category will be created or added.