<p>I believe there are two equations:</p>
<p>Production = Gross Value Added + Value Intermediate Goods <br/>
and <br/>
Production = Sales + Inventory Change</p>
<p>The TATA example refers to the second equation. And (as per your comment) you can substitute the second equation into the first and eliminate production.</p>

CC BY-SA 4.0
2021-02-17T16:35:29.450Z
2021-02-17T16:35:29.450Z
Daniel
<ol>
<li>Inventory change=last period's ending inventory- the current period's ending inventory.</li>
<li>Change in inventory= production of the firm during the year- sale of the firm during the year</li>
</ol>

<p>No doubt in (1) but in (2) "production of the firm during the year- sale of the firm during the year" tells about remaining part which is unsold. How could we say unsold product is "change in inventory"?</p>

<p>Numerical example to this?
Gross value added (GVA) = Value of sales by the firm + Value of change in inventories – Value of intermediate goods used by the firm.</p>

<macroeconomics><nonexpert><national-income>
Change in inventory
Raju
# Change in inventory

(Asked by: username_0 on 2019-01-29)

1. Inventory change=last period's ending inventory- the current period's ending inventory.
2. Change in inventory= production of the firm during the year- sale of the firm during the year

No doubt in (1) but in (2) "production of the firm during the year- sale of the firm during the year" tells about remaining part which is unsold. How could we say unsold product is "change in inventory"?

Numerical example to this?
Gross value added (GVA) = Value of sales by the firm + Value of change in inventories – Value of intermediate goods used by the firm.

**Tags:** macroeconomics, nonexpert, national-income

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## 1 answers

### Answer by username_1 on 2021-02-17. Score: 0

I believe there are two equations:

Production = Gross Value Added + Value Intermediate Goods   
and   
Production = Sales + Inventory Change

The TATA example refers to the second equation. And (as per your comment) you can substitute the second equation into the first and eliminate production.


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