Open-to-Buy is a Retail Term describing the merchandise budgeted for purchase by a retail store for a given period that has not yet been ordered and/or the Practice of managing such Open-to-Buy plan. This includes managing inventories that need to be managed down to pre-determined levels at the end of the period or season.
Open-to-Buy is typically calculated as:
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Open-to-Buy (Analysis) is an effective tool for store management and buyers in Retail to manage a key asset; Inventory. Without a solid grasp of the flow of goods throughout an operation, retailers often find their inventories to be out of balance. While multiple classes may have a full year’s worth of sales sitting on racks across multiple stores, other classes may constantly be out of stock. Not only does this negatively affect cash flows, but just as importantly, it affects customer traffic as no customer wants to see the same old goods sitting around week after week while the items they really want are constantly out of stock.Community Importance Rating: