What potential issue does the error "Allowed memory size exhausted" indicate when creating thumbnails in PHP?

The error "Allowed memory size exhausted" indicates that the PHP script has used up the memory limit set in the php.ini configuration file while trying to create thumbnails. To solve this issue, you can increase the memory limit in the php.ini file or within your PHP script using the ini_set() function.

// Increase memory limit in PHP script
ini_set('memory_limit', '256M');