Open To Buy

Open to Buy system operates using a flow calculation.

This is shown in the following simple, unit-based, example where the Closing Stock for the first period is a result of adding the Opening Stock, On Order and Open to Buy, and then subtracting the Forecast Sales. This closing stock then becomes the opening stock for period two and so on.

Each period is therefore dependent on the previous periods’ stock levels in the determination of its own Open to Buy which is calculated as the difference between the intake required (closing stock required minus the opening stock less sales) and the on order figure. In column one in the above example the calculation of the Open to Buy is 500 – (200 -100) – 200 = 200.

Open To Buy module can be accessed via the side menu if enabled. The menu exposes reports and forms required to compose the OTB plan.

In ForecastingApp the plan is composed using retail values i.e. net retail sales including any markdowns (and also sales tax). This way the the plan not only provides you with the purchasing budget but also

Frequently accessed items are at the top of the list, and various setup items are towards the bottom.

To get started with the system the category dimension must been set up using the maintenance tools. Also the historical data including sales history and current inventory levels are needed if the plan is not going to be zero-based.

To start we set up the the following assumptions for each period in the future:

  1. Tax rates for each category and time period.

  2. Average unit prices for each category. If the current inventory balances have been loaded to the system the pricing schedule is automatally filled based on the current inventory. Whilst prices are not mandatory they can provide with approximate quantities for range or space planning, for example.

  3. Forward cover weeks for each category and time period.

Both tax and forward cover need to be fully input only once for full year. Once they are present they can be reused in subsequent periods and updated as needed.

Once the assumptions, category structure and retail calendar are set we can create first plan:

  1. Ensure category structure and calendar have been set up. See dimension maintenance for details.

  2. Set tax rates for each category in the planning period.

  3. Set forward cover for each week in the planning period.

  4. Load historical data (optional). See data source topic for details.

  5. Set the unit prices and margins if you do not want to use historical defaults based on your current stock.

  6. Create demand forecast using Inventory Planner or Product Mix. At all times when creating the forecast you work with sales@retail value i.e. the actual sales (including tax).

  7. Resulting Open To Buy Teport is updated every time you chaneg any of the above inputs.

  8. Use Sales & Margin and Stock and Intake forms to explore and adjust the plan in full detail.

  9. Inventory Overview and Variance Report can be used to assess the forecast performance and compare it with the actual figures as fresh data is recommended to be loaded periodically.