Work out open to buy budget instantly with clear inputs, formula shown and shareable results.
Open to buy is the retail value of merchandise a buyer may still commit for a period: planned closing stock plus planned sales and markdowns, less the stock already on hand. It is the discipline that stops inventory drifting above the level the sales plan can support.
Open to buy at retail
OTB = Planned closing inventory + Planned sales + Planned markdowns - Opening inventory
At cost
OTB at cost = OTB at retail x Cost complement
Yes. Subtract outstanding orders due to arrive in the period, otherwise the buyer double-commits the same budget.
Because a markdown reduces the retail value of inventory without any goods leaving, so it consumes the same retail budget that a sale does.