Additionally, the population at this place has a reputation for not only having a good taste of fashion but also with the high purchasing power. This makes it convenient for Miss. Smith’s Store to thrive in the fashion business.
The main reasons why Miss. Smith’s Stores will focus on this Open –to- Buy approach will be to ensure that there is enough level of stock that can support the number of sales to be generated. This will ensure that the Store does not have too much inventory concentrated within a given period. There is a danger of having this predicament since it can always slow down the cash flow and further promote the reduction of profits with a lot of markdowns. (Eliah, 12) Again, the OTB ascertains that there would be no under buying by Miss. Smith’s Stores. Sometimes when sales opportunities are missed, then it follows that potential profits are forgone. Miss. Smith’s Stores is committed to ensuring that it stocks the right amount of the clothing it intends to sell and promote their sales at the most appropriate time with the help of Open- To- Buy Plan
Miss. Smith’s Stores is interested in taking the maximum advantage of adding new products and also availing special buys. In order to do this, Miss. Smith’s Store will tend to hold some of its Open- To Buy dollars. This way, it will enable the stores to identify and react to those products that sell faster and as such would aspire to restock them.
The OTB plan that the Store will maintain will be used as the roadmap to manage the sales to maximize the profits, but will also be backed by serious planning for individual category of the entire products that the store stocks. Miss. Smith’s Stores is determined to ensure that its inventory is kept on a spreadsheet, which can allow people to quickly understand the flow.