This is a crucial metric for retailers, as it helps a buyer understand how much of a product they should order to maintain optimal inventory. It is also important for a brand to understand since this may explain order fluctuations and cancellations. The formula for Open-to-Buy accounts for beginning month inventory, end of month inventory, sales and markdowns (Open-to-Buy = expected sales + expected markdowns + planned end of month inventory - planned beginning of month inventory). A more simplistic way of calculating this is to simply subtract merchandise on order from planned purchases, but this fails to account for inventory details.

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