The auto trace module from the last post works really well but requires some clean up and here is an easy way to do that.

1) Adjust the png image until it looks good:

2) Cut to svg and save the file:

3) Import the svg into Inkscape:

You will notice the outline isn't smooth, but this is easy to fix:

4) Select the bucket fill tool and fill the imported svg:

5) Then you can double click on the image and separate the bucket fill and the original svg:

6) Go to the fill and stroke dialog and set the stroke for the bucket fill:

7) then go to Path> Stroke to Path, double click on the path and you can separate it from the bucket fill:

Here you can see all three together, the outline and the bucket fill are nice and smooth compared to the original trace:

And now there is a nice outline that can be used for things like a laser or cnc, and since it's an svg it can be sized to whatever dimension is needed.