What does the Open-To-Buy strategy include?

The Open-To-Buy (OTB) strategy is a retail planning approach that helps retailers manage their inventory and budget effectively. It specifically involves calculating and planning for the total amount of inventory to be purchased within a specific period, taking into account several factors.

Incorporating planned sales, markdowns, and inventory is essential because it allows retailers to understand how much product they will need to meet customer demand while also accounting for discounts and sales promotions that may affect overall inventory levels. By including both markdowns and planned sales, retailers can adjust their inventory levels proactively, ensuring that they are neither over-stocked nor under-stocked.

When developing an Open-To-Buy strategy, it's crucial to look at these variables collectively in order to maintain proper cash flow and maximize profitability, making the comprehensive approach of option C the most accurate representation of what an OTB strategy encompasses. This thorough consideration is what differentiates an effective OTB strategy from a simpler view that might only focus on sales or inventory numbers in isolation.