Question

If your planned sales are $100,000, your planned markdowns are $10,000, and your end-of-month stock goal is $50,000, what is your Open-to-Buy amount if you currently have $40,000 in inventory on hand?

Accepted Answer

To calculate your Open-to-Buy, which is the amount of money you have available to spend on new inventory during a specific period without exceeding your planned stock levels, you first determine your Total Planned Needs. You find this by adding your planned sales, planned markdowns—which are price reductions taken to move slower-selling goods—and your end-of-month stock goal, resulting in a total requirement of $160,000. Think of this like planning a pantry: you need enough food for the month, enough to cover items you plan to discount or throw away, and a specific amount left over to start next month. Next, subtract your current inventory on hand, which is $40,000, from that total need of $160,000. This leaves you with an Open-to-Buy amount of $120,000, which represents the total value of new merchandise you can purchase to meet your goals.

If your planned sales are $100,000, your planned markdowns are $10,000, and your end-of-month stock goal is $50,000, what is your Open-to-Buy amount if you currently have $40,000 in inventory on hand?

To calculate your Open-to-Buy, which is the amount of money you have available to spend on new inventory during a specific period without exceeding your planned stock levels, you first determine your Total Planned Needs. You find this by adding your plann....

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If your planned sales are $100,000, your planned markdowns are $10,000, and your end-of-month stock goal is $50,000, what is your Open-to-Buy amount if you currently have $40,000 in inventory on hand?

To calculate your Open-to-Buy, which is the amount of money you have available to spend on new inventory during a specific period without exceeding your planned stock levels, you first determine your Total Planned Needs. You find this by adding your plann....

Community Answers