Inventory levels refer to the amount or quantity of goods that a business has available in their stock. It is an essential aspect of supply chain management and involves keeping track of how many products are on hand, as well as monitoring trends in demand and adjusting orders accordingly. High inventory levels can lead to increased storage costs while low inventory levels can result in lost sales due to unavailability of the product. Therefore, maintaining optimal inventory levels is crucial for ensuring smooth operations and maximizing profitability.