Question

what is the difference between planned and unplanned inventory accumulation? write down the relation between change in inventories and value added of a firm​

Answer 1

Answer:

Planned Inventory. It refers to change in the stock of inventories which has beem planne. ... It refers to change in the stock of inventories which has occurred unexpectedly. In a situation of unplanned inverntory accumulation, due to unexpected fall in sales, the firm will have unsold stock of goods.

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.