What Is Spontaneous Financing? What Is the Most Common Source

question 139

Essay

What is spontaneous financing? What is the most common source of this type of financing? If you see 2/10 net 30 on a shipment invoice, what does it tell the buyer about the payment terms?

---

Definitions:

Excessive Inventory

A larger amount of stock than what is needed, leading to unnecessary storage costs and potential obsolescence.

Demand Volatility

The degree to which demand for a product or service can fluctuate unpredictably over a certain period, affecting supply chain and inventory management strategies.

Safety Inventory

Inventory kept as a buffer against forecasted demand and supply variability to prevent stockouts.

Forecasted Demand

The estimated amount of product or service that will be bought by customers in a future period, often used for planning in business operations.