An improved UAV system and methods for operation in an inventory management system. The methods include generating a three dimensional (3D) map and estimating a position and orientation of the UAV based upon this map; autonomously navigating the UAV in the environment by using the generated 3d map in conjunction with the position and the orientation of the UAV; performing static and dynamic obstacle avoidance in the environment using collision avoidance; and finding the optimal path from a source node to a destination node within the environment.