The target stock level for the end of the period. Why Retailers Use It
Helps identify slow-moving inventory, allowing for faster stock rotation.
Ensures key products are available when customers want them. open to buy definition
Plans can be broken down by entire store, specific seasons, departments, or even individual vendors. The Core Formula
Retailers use data rather than "gut instinct" to manage their inventory levels. An OTB plan typically factors in: The projected revenue for the period. Current Inventory: The physical stock already on hand. Projected Markdowns: Discounts expected during the period. The target stock level for the end of the period
While specific variations exist, the fundamental logic behind OTB is:
What is Open-to-Buy (OTB)? Definition, Meaning & Examples - Board open to buy definition
Prevents over-committing capital by buying too much stock.