Open To Buy Budget Calculator

Work out open to buy budget instantly with clear inputs, formula shown and shareable results.

About Open To Buy Budget Calculator

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.

Formulas

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

Worked example

With the default values below, Open To Buy Budget Calculator returns Open to buy at retail of $6,540,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Planned closing inventory at retail: 9,600,000
Planned sales for the period: 7,200,000
Planned markdowns: 540,000
Opening inventory at retail: 10,800,000

Results

Open to buy at retail: $6,540,000.00
Open to buy at cost (55% cost ratio): $3,597,000.00
Planned sales plus markdowns: $7,740,000.00
Planned change in inventory: -$1,200,000.00

Step by step

1Values used
2Open to buy at retail
3At cost
4Open to buy at retail= 6,540,000.00
5Open to buy at cost (55% cost ratio)= 3,597,000.00
6Planned sales plus markdowns= 7,740,000.00
7Planned change in inventory= -1,200,000.00

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Should merchandise already on order be deducted?

Yes. Subtract outstanding orders due to arrive in the period, otherwise the buyer double-commits the same budget.

Why include markdowns?

Because a markdown reduces the retail value of inventory without any goods leaving, so it consumes the same retail budget that a sale does.