Planned Inventory Accumulation: Inventory that has been planned In the event of a predicted drop in sales, the company will have unsold stock of goods that it had not budgeted for. As a result, inventories will be built up in advance.
Unplanned Inventory Accumulation: Inventory accumulation that was not intended. In the case where there is an unexpected decline in the sales, the company will have unsold goods that it had not budgeted for. As a result, unanticipated inventory accumulation will occur.
Relationship between Inventory Changes and Value Added: Change in a firm's inventories over a year = value added + intermediate products utilised by the firm – the firm's sale over the year and value added. It is value added in the net contribution made by a firm in the production process = value of production – value of intermediary products consumed.