Open To — Buy

Here’s a solid, content-rich explanation of — written to be useful for merchandising, retail planning, and finance teams. 1. Definition (Plain & Professional) Open to Buy (OTB) is a retail financial budget that represents the planned amount of inventory a buyer can purchase during a specific period without exceeding projected sales, markdowns, and desired ending stock levels. In short: How much you can order, in dollars (or units), while staying on plan. 2. The Core Formula The most common OTB formula (at cost or retail):

OTB = Planned Ending Inventory + Planned Sales + Planned Markdowns – Planned Beginning Inventory – On-Order Inventory Or more simply (at retail value): open to buy

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