Glossary · Purchasing
What is Open-to-buy (OTB)?
Open-to-buy is the budget still available to spend on inventory in a period after allowing for stock on hand, on order and planned sales.
It stops buying from outrunning demand or cash. When stock plus orders already exceed planned sales, open-to-buy is zero or negative, whatever any single reorder point says.
Formula
Open-to-buy = planned sales + planned end stock − stock on hand − stock on order
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