The machine intakes from whichever inventory it is configured to intake to, and then when it has some output, it basically tells the socket that it has output to put somewhere, and the socket finds the machine output that's installed on it (if one exists), and outputs whatever the machine wanted output via the machine output and reports back to the machine how much was actually output. If there isn't one, or its inventory was full, or wasn't configured or anything like that, the machine will just stop working until all of it's output has been output somewhere. You don't have to configure the machine itself to output somewhere though because there can only be 0 or 1 places it can output to on a socket at a given time (you can only install one machine output per socket).