Free tool
Open to buy template and calculator
Open to buy (OTB) is the dollars a department can still order for a month without overshooting its stock plan. Fill in each department by month below and the plan shows OTB at retail and at cost, and flags any month you are overbought. It opens on a 6-store apparel chain’s spring season. Download it as an Excel workbook with every formula live, or as a PDF.
Updated November 8, 2026
Morsa makes this free tool. Morsa is software with an AI agent that works in your ERP, email and Teams.
How to use the open to buy template
Pick the first month and the length: 3, 6 or 12 months.
Set up each department or class: its initial markup, the share of the retail price that is markup (cost $40, retail $100 = 60%), and the stock on hand at retail at the start of the first month. The plan covers the whole chain; for a plan by store, keep one copy per store.
Enter the plan by month: planned sales, planned markdowns and planned end-of-month stock, all at retail. Paste rows straight from your spreadsheet if you have them.
Enter on order by the month it is due in, at cost as it sits on your POs, or switch to retail. Mid-month, add what has already arrived in Received so far.
Read the result: OTB this month at cost is what you can still place on POs. A red number means overbought. The season line shows what is still open and what is overbought apart, because an overbought month does not free money in another.
Download the workbook or start blank for your own plan.
The open to buy formula
The retail method counts everything at selling price, so markdowns can sit in the same sum as sales:
Planned receipts = planned sales + planned markdowns + planned end-of-month stock - beginning-of-month stock
Open to buy at retail = planned receipts - on order (at retail) - received so far this month (first month only)
Open to buy at cost = open to buy at retail x (1 - initial markup)
Each month’s beginning stock is last month’s planned end-of-month stock, so the plan rolls forward. Markup here is a percent of retail, as retail math courses define it, which is why cost is retail x (1 - markup). Multiplying by the markup itself gives the wrong answer. A PO on order at cost becomes retail by dividing: cost / (1 - markup).
Worked example: one month for an apparel chain
Women’s tops at a 6-store apparel chain, February, with an initial markup of 60%:
| Line | February | How |
|---|---|---|
| Beginning stock | $180,000 | On hand at retail on February 1 |
| Planned sales | $60,000 | From last year plus the trend |
| Planned markdowns | $6,000 | End of the winter clearance |
| Planned end-of-month stock | $210,000 | Building for March |
| Planned receipts | $96,000 | 60,000 + 6,000 + 210,000 - 180,000 |
| On order | $70,000 | $28,000 of POs at cost / (1 - 0.60) |
| Received so far | $20,000 | $8,000 at cost already in |
| Open to buy at retail | $6,000 | 96,000 - 70,000 - 20,000 |
| Open to buy at cost | $2,400 | 6,000 x (1 - 0.60) |
The buyer can still place $2,400 of POs for February tops. March opens with $210,000 of stock and $19,000 to buy at retail.
Setting planned end-of-month stock
The stock-to-sales ratio is a month’s beginning stock / that month’s sales; the plan shows it for every month. To set a month’s planned end-of-month stock, multiply next month’s planned sales by the ratio you want to open next month with, usually last year’s for that month. Women’s tops plan $85,000 of March sales; at a March ratio of 2.47, February should end with 85,000 x 2.47 = $209,950, about $210,000.
Open to buy by department
One total hides a department that is overbought. The same chain’s February, all three departments:
| Department | OTB at retail | OTB at cost |
|---|---|---|
| Women’s tops (60% markup) | $6,000 | $2,400 |
| Denim (55% markup) | -$12,000 | -$5,400 |
| Outerwear (58% markup) | $20,000 | $8,400 |
| All departments | $14,000 | $5,400 |
Denim has $80,000 at retail on order against $68,000 of planned receipts, so it is $12,000 overbought. The store-wide $5,400 is real, but only outerwear and tops have it to spend.
The hardlines example (a 4-store home and hardware chain, August to January) shows the other pattern: cookware has $11,000 at retail to buy in August ($6,050 at cost at a 45% markup), while small appliances, loaded for the holidays, run overbought in September and October.
Why open to buy goes wrong
Late receipts. A PO due in March that lands in April sits in the wrong month twice. Re-date it the day the vendor tells you.
Vendor cancels. A cancelled line still counted as on order hides money you could spend.
Returns. Customer returns put stock back on the floor that the plan did not expect. Plan sales net of returns.
Markdown timing. A clearance taken a month early or late moves stock and OTB with it. Plan markdowns by the month you will take them.
Uncounted transfers. Stock moved between stores or to an outlet is not a sale. Plan each location in its own copy, or keep transfers out of planned sales.
Closed POs still counted as on order. A PO short-shipped and closed in the ERP but not in the sheet keeps the balance on order forever.
Three of the six (late receipts, vendor cancels, closed POs) are the on-order number being wrong. OTB is only as good as the vendor dates behind it.
Open to buy and reorder points
OTB sets the dollars a department may receive in a month; a reorder point sets when each staple item is reordered, and those receipts count against the same month’s OTB. Work out each staple’s buffer with the safety stock calculator.
Frequently asked questions
What does open to buy mean?
It is the part of this month’s buying budget that is still free: the stock you planned to receive, minus what is already on order.
Is open to buy calculated at retail or at cost?
The plan runs at retail, because sales, markdowns and stock are counted at selling price. Convert the result to cost for the POs: OTB at retail x (1 - initial markup). The tool shows both.
How often should I update an open-to-buy plan?
Re-run it monthly when the month’s actuals close, and weekly in the peak season. Enter what has already arrived this month in Received so far, so a mid-month figure does not count those receipts twice.
What if my open to buy is negative?
You are overbought for that month by that amount. Cancel or push back POs due that month, move the stock to another store or channel, or raise planned sales or end-of-month stock if the trend supports it.
Do I need open-to-buy software?
Not for the math: this template handles up to 20 departments over 12 months. Software earns its cost when sales and on order must update themselves from the POS and ERP. Retail systems such as LS Central and planning tools such as Inventory Planner have OTB views (what planning software costs).
Related tools
Where Morsa fits
Keep on order true without chasing vendors by hand.
Morsa turns the open-to-buy plan into purchase orders, confirms every ship date with the vendor and keeps the ERP current, from the buyer’s mailbox, Teams or whatever your team already uses.
