Inventory forms a significant segment of current assets. For manufacturing businesses a chunk of their current asses is in inventory. For durable goods manufacturers work-in-process constitutes a good portion of their current assets. For trading businesses finished goods account for a good portion of current asses. In manufacturing businesses roughly 30% to 70% of current asses is in inventory of one form or the other. In trading businesses the maximum range can even approach 100% and the maximum may never fall below 50% orso. So large funds are kept invested in inventory. As there funds are not free of costs and invested funds are limited, every business has to see that it carries only just enough inventory which must ensure that: