If you are on a later version of GP - I think 2013 onwards, each user can modify their lookup on Item Numbers to exclude Inactive. When you do a lookup, drop the little dropdown beside "View: All Items...." and choose to Exclude Inactive. You can then do the drop down again and choose to "Set as default view". This then (I believe) means whenever you look up items from anywhere, the default is excluding inactives. The same applies for customers and vendors.
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