Change in inventory stock is caused by two factors:
(i) Unexpected fall in demand in the current year Producers have expected demand of 50000 umbrellas but owing to the failure of monsoon, only 10000 umbrellas are sold during a year. Accordingly, 40000 umbrellas are added to the existing stock.
(ii) Expected rise in demand in near future Producers may expect a spurt in demand (and therefore, increase in its price) in the near future. Accordingly, they pile up stocks during the current year.