Magento Configurable Products

http://www.mag-manager.com/useful-articles/magento-configurable-products - Magento Configurable Products allow your customers to select the variant they desire by choosing among the various options. For example, you want to sell T-shirts in two colours and three sizes. In this case you would have to create six Magento
simple products as individual products (each with its own SKU) and then add these six products to a configurable product, so your customers could choose a size and a
colour of a product, and add it to their carts. Similar functionality is available by using Magento custom options of Magento Simple products, but in the case of Custom Option the inventory will not be checked or updated. Get more details here http://www.mag-manager.com/useful-articles/magento-configurable-products