The Big Picture Of Stock Locations
There are two types of stock locations:
Inventory stock location. An inventory stock location is one at which an asset can reside when it's not installed at a service point.
Parent location. Stock locations that are used to organize inventory locations are called "parent" stock locations. You would create parent locations to provide a hierarchical perspective as to the location of your assets.
For example, assume you have a large warehouse with many different logical areas in which assets can be stored. You could create an inventory stock location for each specific shelf / storage area in the warehouse and then group all of these inventory locations under a parent location (where the parent location would be the "large warehouse").
Parent locations are not necessary. Parent locations are only needed if you want to view stock locations in a hierarchy on the Stock Location Inventory page.