An example is going up the scale in 3 notes per string pattern , picking should be like this : D U D D U D D U D ,etc .
When going up the scale , use U D U U D U ,etc.
Inside and outside picking are situations you face when you use strict alternate picking technique ... For odd number of notes per string , you'll be facing inside and outside picking alternately when you change strings.
For even number , you'll constantly find yourself doing either inside or outside picking ... For exercising , you should focus on outside picking since it's much harder , but for playing it's wiser to choose inside picking (for the pentatonic scale you typed , start with an upstroke to go on inside picking).