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In the Admin panel, go to STORES > Settings > Configuration.
Click on the Catalog to expand, and choose the Inventory option.
Set up the fields of Stock Options
Click on the Stock Options to expand,
In the field of Decrease Stock When Order Is Placed, choose Yes from the dropdown to add or subtract the quantity of a product in the shopping cart.
In the field of Set Items' Status to be in Stock When Order is Cancelled, choose Yes from the dropdown when the order is cancelled and the product is returned.
In the field of Display Out Of Stock Products, choose Yes from the dropdown to show that the product is no longer exist in stock.
In the field of Only X left Threshold, enter the number of product left in the stock.
In the field of Display Products Availability In Stock on Storefront, choose Yes from the dropdown to show the product availability on the product detail page.
In the field of Synchronize with Catalog, choose Yes from the dropdown to automatically synchronize inventory data according to the catalogue changes.
Now click on the Save Config button to save these configurations.
Set up the Product Stock Options
Click on the Product Stock Options to expand,
In the field of Magento Stock, choose Yes from the dropdown to apply the inventory setting for your product.
In the field of Backorders, choose one of the options:
No Backorders: if the product is out of stock then don't allow any backorder.
Allow QTY Below 0: When the quantity is less than 0 then allow the backorder.
Allow QTY Below 0 and Notify Customers: when the quantity is less than 0 then allow the backorder and notify the customer that can still place orders.
In the field of Maximum Qty Allowed in Shopping Cart, set the maximum quantity.
In the field of Out-of-Stock Threshold, set the specific value.
In the field of Minimum Qty Allowed in Shopping Cart, set the minimum quantity.
In the field of Notify for Quantity Below, set the specific quantity of the product and notify customers that the item is out of stock.
In the field of Enable Quantity Increments, uncheck the box of the Use system value and choose Yes from the dropdown.
In the field of Automatically Return Credit Memo Item to Stock, choose Yes to a placed item will be back to inventory when any problem with the credit memo.
Now click on the Save Config button to save these configurations.