Buy — Open To

The basic formula for Open to Buy at Retail is:

Purchase orders already placed with vendors that are scheduled to arrive during this current period. open to buy

OTB is usually calculated in retail dollars (the price you sell it for) rather than cost dollars (the price you buy it for), though it can be converted to cost dollars when writing purchase orders. It represents the difference between the inventory you need to achieve your sales plans and the inventory you actually have on hand or on order. The basic formula for Open to Buy at

Enter . Often referred to as the "retailer’s budget for inventory," OTB is the financial and merchandising tool that tells you exactly how much inventory you can purchase in a given period without hurting your cash flow or missing your sales targets. This is usually the actual physical inventory count

How much stock you started with at the start of the period. This is usually the actual physical inventory count or last month’s EOP.