The impact of a linked useage of the open-to-buy system and retail inventory method on performance measurement

Abstract

Because of the need to match consumer demands with merchandise offered, the most significant tangible asset held by retailers is inventory. The selection of merchandise and its subsequent control is critical if profit objectives are to be met. A system frequently used by retailers to control inventories is the Open-To-Buy (OTB) system. The objective of this system is the control of purchases so that corporate profitability objectives are met.