Open To | Buy Formula

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

The value of orders already placed but not yet received. Example Calculation open to buy formula

The value of the stock you have on hand at the start of the period. The desired stock level you want to have

The value of projected discounts or price reductions. The value of projected discounts or price reductions

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

The revenue you expect to generate during the period.

The formula is a retail inventory management tool used to determine the remaining budget available for purchasing new merchandise while maintaining ideal stock levels. Core Formula The standard way to calculate OTB is as follows: