Problem 4.2

                                                  Open-to-Buy Problem

Jane buys men’s sport shirts. She is in the process ofestimating her June and July open to buy. As of June 10, she hasactual stock on hand of $1,543,768. Jane’s area has had sales of$235,333 (against total June planned sales of $638,950). Total Junemarkdowns of $25,238 (out of a plan of $75,862) have also beentaken. The current on-order for June is $115,338, of which Janeexpects that $15,000 will not arrive until July. Likewise, of theJuly on order of 20,432 she expects $12,000 to arrive in June. TheJune EOM plan is $1,210,562. Before calculating her OTB Janedecides that, if she is overbought, she will return $36,000 worthof knit shirts to one of her vendors for credit.

The July sales plan is $433,985 while the July markdown budgetis $65,666. She expects $2,000 of the July on order to be past due.Likewise, she expects that $3,000 of the August on-order willarrive in July. The July EOM plan is $722,500.

Use the attached OTB worksheet to estimate Jane’s totalopen-to-buy for June and July.

                              Table 8

        Estimated OTB for the Month of                               

Category	Amount
Stock on Hand (as of             )	$
Remaining On-Order
Total Liability
Remaining Sales
Remaining Markdowns
Estimated Past Due
Estimated Early Ships
Estimated EOM
EOM Plan
Over/Under Bought
Adjustments
Adjusted OTB
Adjusted Estimated EOM

           Table 9

        Estimated OTB for the Month of                               

Category	Amount
Estimated BOM
On-Order
Total Liability
Planned Sales
Planned Markdowns
Estimated Past Due
Estimated Early Ships
Prior Month Past Due
Prior Month Early Ships
Estimated EOM
EOM Plan
Over/Under Bought
Adjustments
Adjusted OTB
Adjusted Estimated EOM