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open-to-buy OTB

In purchasing planning, a buyer calculates the total cost of a specific type of merchandise needed for a particular time period. After placing part but not all of that order, the actual cost spent is calculated. The difference between the planned cost and the actual cost is known as open-to-buy. This amount represents the flexibility budget available to adjust orders or make changes. The open-to-buy provides an opportunity for buyers to make adjustments based on changing market conditions, sales performance, or other factors, allowing them to optimize their purchasing decisions.