How is retail OTB calculated?

How is retail OTB calculated?

You can also calculate it by hand using this formula:

1. Open to Buy = planned sales + planned markdowns + planned end of month inventory – beginning of month inventory.
2. Inventory turnover ratio, or turn rate, is calculated by dividing sales by inventory.

What is OTB value?

OTB is essentially the difference between how much inventory is needed and how much is actually available. This includes physical inventory on hand, in transit, and any outstanding orders. To take advantage of special buys or to add new products, some of the OTB dollars should be retained for future stock purchases.

What is open to buy at retail?

Open to buy definition: a financial budget for retail merchandise planners. Essentially, OTB is a purchasing plan which takes into account current inventory levels and projected sales for a set time period.

What are the steps of OTB process?

You can create an OTB planning in four steps. The first step is to develop a sales plan. Next, establish an inventory plan and create planned markdowns and inventory adjustments. Finally, create an inventory receiving plan.

What is a Wssi merchandising?

WSSI stands for ‘weekly sales, stock and intake’: it’s a merchandising tool that calculates and reports on levels of current and future sales and stock.

What is the formula for planned purchases?

Planned purchases = Planned Sales + Planned Reductions + Planned EOM – Planned BOM.

What is an OTB business?

Open-to-buy (OTB) is an inventory management system that works with your retail business. It’s the amount of merchandise your retail store can buy during a certain time period.

How do you calculate retail build?

The Basic Retail Price Formula

1. Retail Price = Cost of Goods + Markup.
2. Markup = Retail Price – Cost of Goods.
3. Cost of Goods = Retail Price – Markup.

What is the formula for calculating cost of goods sold?

Costs of Goods Sold (COGS) represent the expenses involved into producing your goods over a certain period of time. The COGS formula is: COGS = the starting inventory + purchases – ending inventory.

How does a Wssi work?

A WSSI allows retailers to manage their inventory based on sales forecasting, actual sales made, and stock information. This helps the retailer determine how much stock is required and when, by generating what is known as Open to Buy.

What does stock intake mean?

Stock-taking or “inventory checking” or “wall-to-wall” is the physical verification of the quantities and condition of items held in an inventory or warehouse.

How do you calculate planned sales?

Stock to Sales Ratio – This is the relationship of stock on hand at the beginning of the month to the planned sales for that month.
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(At a Glance)

How do you calculate planned inventory?

1. Basic stock method

1. Stock at the beginning of the month = Planned monthly sales + basic stock.
2. Average stock for season = Total planned sales for season / Estimated inventory turnover.
3. Average monthly sales = Total planned sales for season / Number of months.

What is KPI in retail?

What is a Retail KPI? A retail Key Performance Indicator (KPI) or metric is a clearly defined and quantifiable measure that can be used to assess the performance of a retail business. These performance metrics can be used in a variety of ways.

What is the basic formula for the retail method?

The cost-to-retail ratio looks at the percentage of an item’s retail price that’s made up of costs. This ratio is calculated using the formula: cost-to-retail ratio = [cost of goods available for sale ÷ retail value of goods available for sale] x 100.

What is the inventory formula?

The basic formula for calculating ending inventory is: Beginning inventory + net purchases – COGS = ending inventory. Your beginning inventory is the last period’s ending inventory. The net purchases are the items you’ve bought and added to your inventory count.

What is the formula to calculate cost?

The formula to calculate total cost is the following: TC (total cost) = TFC (total fixed cost) + TVC (total variable cost).

What does Wssi mean in merchandising?

weekly sales, stock and intake

WSSI stands for weekly sales, stock and intake and it usually takes the form of an application which is used by companies to plan and monitor sales and stock on a weekly basis. A WSSI allows retailers to efficiently manage stock based on a sales forecast and actual sales and stock information.

What is short ram intake?

The short ram air intake is a form of aftermarket air intake for automobiles with internal combustion engines. It replaces the OEM air intake with a short metal pipe and a conical air filter inside the engine bay.

How do you do a 6 month merchandising plan?

Seven-Step Procedure for Calculating the Six-Month Merchandise Plan/Budget

1. Total Planned Sales and Total Planned Reductions.
2. Monthly Distribution of Total Planned Sales.
3. Monthly Distribution of Total Planned Reductions.
4. Beginning of the Month (BOM) Stock for each Month.
5. Ending of the Month (EOM) Stock for each Month.

How do you calculate inventory needs?

Take the average number of days (lead time) between ordering items and having these items ready for sale. Multiply this by your average daily sales volume over the past month/quarter/year. Then add your safety stock number.

What are the 3 inventory control models?

Three of the most popular inventory control models are Economic Order Quantity (EOQ), Inventory Production Quantity, and ABC Analysis. Each inventory model has a different approach to help you know how much inventory you should have in stock.

What is average inventory formula?

Average inventory is a calculation of inventory items averaged over two or more accounting periods. To calculate the average inventory over a year, add the inventory counts at the end of each month and then divide that by the number of months.

What are the 5 KPIs in retail?

Retail Key Performance Indicators and Metrics

• Sell-through Rate. Number of units sold / original inventory x 100.
• Year-over-year Growth. (current period revenue – previous period revenue) / previous period revenue x 100.
• Gross Margin Return on Investment (GMROI)
• Conversion Rate.
• Sales per Square Foot.

What is the retail formula?

Retail Price = Cost of Goods + Markup. Markup = Retail Price – Cost of Goods. Cost of Goods = Retail Price – Markup.