What is the difference between planned and unplanned inventory accumulation?
Planned inventory accumulation- In the case of planned inventory accumulation when there is a drop in the sales which leads to an excess of stock of goods, this excess has been anticipated. Since it is anticipated it adds on to the existing inventory and hence is known as planned inventory accumulation.
Unplanned inventory accumulation – In the case of an unplanned inventory accumulation there is an unexpected drop in sales that adds to the existing inventory. Since this accumulation was not expected and hence unplanned this adversely affects sales and if several businesses face this simultaneously it might even lead to the slowdown of the economy.
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