The purchasing budget is made up of two elements:

The latter can act as a buffer against, for example, unexpected cost increases or can be used to cover unforeseen demand for a particular article.

In planning the OTB, you set the total budget for a given time period (for example, the spring season), then allocate this to sites, merchandise categories, and so on. Each month, the system determines the portion of the budget that has already been consumed (based, for example, on open purchase orders and goods receipts) and the amount that remains available for additional purchases.

The difference between total purchasing requirements for a period and the commitments already made for that period is known as open-to-buy (OTB). In other words, open-to-buy is the buying power still available in a period after the deduction of purchase orders, stock transfers, and goods receipts and the addition of goods issues.

Events that lead to change in open-to-buy include:

You can also create exceptions which will automatically check for weak points and warn buyers when OTB exceeds or is close to exceeding a certain amount.