The Average Inventory Level (AIL) is an important business metric used to measure the amount of inventory held on average by a company. A higher AIL indicates that the company usually has more items in stock, while a lower AIL suggests they have fewer items available. It’s calculated as the sum of the beginning and ending inventory levels divided by two over a certain period of time. The result gives management valuable insight into the overall inventory management strategy, allowing them to make adjustments to maximize efficiency, reduce costs, and ensure customer satisfaction.