Inventory Location and subinventory location.

All,My understanding is that for each inventory organization there is a location associated and when you define a location,you can associate it to an inventory org,so many locations can be associated to an inventory organization.

when you define a subinventory under an inventory org, what is the location you specify. can you specify any location that you want, because the subinventory location LOVlets you pick all the locations.

so what is the relation between inventory location and subinventory location , can someone explain in detail ?
Thanks.