Full Form of OTB

What is OTB?

Open To Buy (OTB) is a retail planning and inventory management metric that represents the amount of merchandise a retailer can purchase during a specific period without exceeding the planned inventory budget. In India, OTB is widely used by large retail chains, e-commerce platforms like Flipkart and Reliance Retail, and small shop owners to control stock levels, optimize cash flow, and avoid overstocking or stockouts. The concept is applied during seasonal sales, new product launches, and budgeting cycles, helping retailers align purchasing decisions with sales forecasts. OTB is calculated by subtracting current inventory and planned purchases from the total inventory budget. It is especially relevant for students pursuing retail management, business administration, or supply chain courses in Indian universities. In competitive exams like CAT, XAT, or NIFT, questions on inventory management often touch upon OTB as a key performance indicator. Understanding OTB enables Indian retail professionals to make data-driven purchasing decisions, ensuring that capital is efficiently utilized while meeting customer demand. The metric is also used in franchise operations and wholesale distribution across India.

OTB का फुल फॉर्म

Example

Our store's OTB for the Diwali season is ₹15 lakh, so we need to carefully select festive inventory without exceeding that limit.

OTB — frequently asked questions

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