Planned Inventory In case of an expected fall in sales, the firm will have unsold stock of goods which had not anticipated Hence, there will be planned accumulation of inventories. Whereas.
Unplanned inventory accumulation. In case of an unexpected fall in sales, the firm have unsold goods which it had not anticipated Hence, there will be unplanned accumulation of inventories.
Relation between Change in Inventories and Value Added Change in inventories of a firm during a year = value added + intermediate goods used by the firm — sale of the firm during a year and value added In net contribution made by a firm in the process of production It IS value added = value of production — value of intermediate goods used.