This is mostly caused by one of more SKU in the order have no inventory information. If you can add those inventory information, it should work fine.

I'm aware of this and might file a bug to make the problem better. 

The "Default Warehouse" is added to the line item. Our client doesn't want to handle stock warehouse/inventory in the system. I figured I could set Inventory Status to "disabled" and Track Inventory to "No"?

Is that not the way to do it?

We have similar question, even when "track inventory" is set to No we still have status "Awaiting Inventory"...  

Dont know what the right way to do this is now.. 

another thing i discovered is when i put the same order to "on hold" the status "Awaiting Inventory" is changed to " Inventory Assigned" 

Its strange because even when we set inventory of a item to be in stock and make it tracable we still have same status "Awaiting Inventory" in the system.. 

Maybe we missed some step when creating purchase order? 

I can confirm having the same behaviour as Goaral.

It sounds like this is a problem we should fix soon. But we need a little more information - more of "business perspective" - why would you want to handle shipment if there is no inventory. What kind of goods are you selling - if it's not a secret. Technically, it is something we supported so yes you can use it, but I'm just being curious here, want to know more on how is it used and why :).

We might be using this wrong. Our client are handling their inventory in a separate system. In the future we'll integrate that with Commerce. We still want to use shipment so that we can add the shipping fees to the order.

If ignoring Shipment all together, how would you change the purchase order status from In Progress to Completed. You can't do that manually in Commerce Manager right?

Normally the partners will remove inventory processing if they are selling digital content - games, for example. So when you buy something, the order "completes" and you don't have to care about shipments and stuffs. Of course they will have to  write some code for that.

It would be interesting to see if you are selling physical stuffs, without tracking inventory but with shipment management. Not saying you can't do that, but it's a bit strange, logically.

One workaround for this is to "synchronize" the inventory back to the Commerce, so you can manage the orders in the time being. We will look into the matter, but it will take time.