A site of mine uses a product inventory where all products are kept. The products can show up in more that one category and is then pulled from the inventory. The Product name and product code is then inserted into the URL.
This creates a problem as there are then duplicated URL's
I don't see how they're duplicate URL's. As you are changing directory locations. Right? But I can see where it could be a duplicate content issue. Which then would drive me back to say, why change the directories if you don't have to?