Open To Buy Formula -

The desired stock level you want to have at the end of the month or season.

If a boutique clothing store is planning for October with these projections: $20,000 Planned End-of-Month Inventory: $15,000 Planned Markdowns: $1,000 Beginning Inventory: $18,000 On-Order Inventory: $4,000 The calculation would be: OTB . Key Implementation Details Open to Buy (OTB) Guide - Retail Dogma open to buy formula

The value of projected discounts or price reductions. The desired stock level you want to have

The value of the stock you have on hand at the start of the period. The value of the stock you have on

OTB=(PlannedSales+PlannedMarkdowns+PlannedEnd−of−PeriodInventory)−BeginningInventory−On−OrderInventorycap O cap T cap B equals open paren cap P l a n n e d cap S a l e s plus cap P l a n n e d cap M a r k d o w n s plus cap P l a n n e d cap E n d minus o f minus cap P e r i o d cap I n v e n t o r y close paren minus cap B e g i n n i n g cap I n v e n t o r y minus cap O n minus cap O r d e r cap I n v e n t o r y