Open to buy meaning delves into the crucial inventory management concept that empowers businesses to optimize stock levels, anticipate demand, and ultimately boost profitability. It’s not just about numbers; it’s about understanding the delicate dance between customer desires and company resources. This framework allows companies to strategically position themselves for success, ensuring they’re always one step ahead in the ever-evolving market.
This in-depth exploration of open to buy meaning will cover everything from calculating OTB to its relationship with pricing strategies, sales forecasting, and financial planning. We’ll also investigate the crucial role of external factors and customer demand in shaping OTB strategies. Learn how to leverage OTB to maintain optimal inventory levels, avoid stockouts, and ultimately, achieve maximum profitability. The practical examples and step-by-step procedures will empower you to confidently implement OTB in your own operations.
Defining “Open to Buy”: Open To Buy Meaning
Open to Buy (OTB) is a crucial concept in inventory management, particularly in retail. It’s essentially the amount of money available to purchase additional inventory to meet anticipated demand and maintain desired stock levels. Understanding OTB allows businesses to proactively manage their inventory, avoiding stockouts and overstocking, ultimately boosting profitability.The key components of OTB involve projecting future sales, considering existing inventory, and setting realistic targets for replenishment.
A well-defined OTB strategy is a cornerstone of efficient inventory control. This approach allows businesses to adapt to fluctuations in demand and maintain a healthy balance between supply and demand. The core idea is to have a clear financial buffer for inventory acquisitions.
OTB in Various Contexts
OTB is broadly applicable across different sectors. In retail, it’s a critical tool for managing seasonal fluctuations, promotional campaigns, and unforeseen demand surges. In manufacturing, OTB can help predict material requirements and ensure smooth production lines. The fundamental principles remain the same, but the specific application and calculation methods may differ based on the nature of the business.
Key Components of the OTB Concept
Several crucial factors underpin the OTB concept. Forecasting future sales accurately is vital. This involves analyzing historical data, market trends, and promotional activities. Analyzing current inventory levels, including quantities and values, is also essential. Finally, establishing realistic sales targets and setting parameters for replenishment is critical.
These factors collectively determine the available budget for inventory purchases.
Comparison with Similar Concepts
OTB differs from safety stock, which is designed to buffer against unexpected demand spikes. Safety stock is a reactive measure, while OTB is a proactive strategy for managing anticipated demand. OTB also distinguishes itself from simply budgeting for inventory. It focuses specifically on the remaining budget for purchasing inventory, taking into account current inventory levels and projected sales. OTB is about the flexibility to adjust purchases based on actual sales and market conditions.
Types of OTB Calculations
Various methods exist for calculating OTB, each with its own strengths and weaknesses. These methods account for different factors and can be customized to suit specific business needs. A flexible approach is key to making OTB a powerful tool.
| Calculation Type | Description | Example |
|---|---|---|
| Basic OTB | A straightforward calculation that takes into account projected sales and existing inventory. | If projected sales are $100,000, and existing inventory values are $20,000, the basic OTB is $80,000. |
| OTB with Markup | Accounts for the markup applied to the cost of goods sold. | Consider a markup of 20%. If the cost of goods sold is $80,000, the OTB with markup is $96,000. |
| OTB with Sales Promotions | Takes into account the expected impact of sales promotions on demand and inventory. | If a promotion is expected to increase sales by 15%, the OTB calculation will reflect this projected increase. |
Calculating Open to Buy
Open to Buy (OTB) is a crucial inventory management tool, enabling businesses to precisely forecast and control their stock levels. A well-calculated OTB provides a clear picture of the available funds to purchase more inventory, allowing businesses to anticipate potential shortages and proactively address demand fluctuations. This proactive approach ultimately leads to improved profitability and customer satisfaction.OTB essentially represents the financial capacity a business has to purchase more inventory.
It’s a dynamic metric that needs constant monitoring and adjustment to reflect changing market conditions and sales forecasts. This understanding allows for the optimal allocation of resources, preventing stockouts and overstocking, both of which can significantly impact profitability.
Formulas for Calculating OTB
OTB calculations typically involve several factors. A common approach is to consider the projected sales and desired inventory levels. The most fundamental formula involves deducting the expected sales from the available budget. For instance, the starting point is frequently the budgeted amount allocated for inventory purchases.
OTB = Available Budget – Projected Sales
Example OTB Calculation
Let’s illustrate with a concrete example. Imagine a clothing retailer with a $100,000 budget for purchasing new stock. Their projected sales for the next quarter are estimated at $75,
Using the formula above, their OTB is:
OTB = $100,000 – $75,000 = $25,000
This $25,000 represents the financial capacity the retailer has to acquire additional inventory within the budget.
Factors Influencing OTB Calculations
Several factors influence OTB calculations. These factors can be broadly categorized into sales-related and inventory-related components. Sales projections, particularly those related to seasonal trends and anticipated promotions, significantly impact the calculation. Inventory levels, including current stock on hand and projected stock requirements, are also key factors.
Potential Sources of Error in OTB Calculations
Inaccuracies in OTB calculations can stem from several sources. Inadequate sales forecasting, particularly for new products or during periods of rapid market change, can lead to inaccurate estimations. Additionally, inaccurate estimations of inventory levels, due to inaccurate stock counts or incorrect inventory tracking systems, can result in significant errors. Another potential error involves neglecting to account for changes in the cost of goods sold, particularly in periods of significant inflation or price fluctuations.
Step-by-Step Procedure for Calculating OTB
A systematic approach to OTB calculation enhances accuracy and facilitates informed decision-making. Here’s a step-by-step guide:
- Determine the available budget for inventory purchases.
- Forecast the expected sales within the specified period.
- Assess the current inventory levels.
- Calculate the projected inventory needed to meet sales expectations.
- Subtract the projected sales from the available budget to determine the OTB.
- Continuously monitor and update the OTB calculation as sales figures and inventory levels change.
By following these steps, businesses can effectively utilize OTB to manage their inventory and ensure they have sufficient resources to meet customer demand while maintaining profitability.
Importance of Open to Buy
Open to Buy (OTB) isn’t just another inventory management term; it’s a crucial compass guiding businesses toward optimal profitability and efficient stock control. Understanding OTB allows businesses to proactively adjust their purchasing strategies, ensuring they have the right products at the right time, preventing overstocking and stockouts. This dynamic approach enables businesses to adapt to market fluctuations and capitalize on opportunities.OTB is fundamentally about understanding the financial room available for purchasing additional inventory.
It’s a living document, constantly adapting to changes in sales, forecasts, and market conditions. This flexibility is essential for companies looking to thrive in today’s fast-paced market.
Significance in Inventory Management
OTB provides a critical link between sales forecasts and purchasing decisions. It essentially acts as a financial buffer, ensuring that a business has the resources needed to respond to fluctuating demand and unexpected sales spikes. This dynamic approach prevents companies from being caught off guard by unforeseen surges in customer interest or disruptions in the supply chain. Without a clear understanding of OTB, businesses risk accumulating excess inventory, tying up valuable capital, or facing stockouts, leading to lost sales and frustrated customers.
Impact on Business Decisions, Open to buy meaning
OTB empowers businesses to make informed purchasing decisions. By understanding the available financial leeway, companies can allocate resources effectively and strategically, focusing on products with the highest potential return. For example, a retailer with a positive OTB can invest in a new product line that aligns with current trends or increase inventory for a particularly popular item. Conversely, a negative OTB signals a need to scale back on purchases or adjust pricing strategies to maintain profitability.
This strategic foresight is invaluable in navigating the complexities of the modern marketplace.
Improving Profitability
OTB’s influence on profitability is undeniable. By preventing overstocking, companies can minimize storage costs, reduce the risk of obsolescence, and free up capital for other investments. Furthermore, by ensuring adequate inventory levels, OTB helps to avoid lost sales due to stockouts. This proactive approach translates into increased customer satisfaction, improved brand reputation, and ultimately, enhanced profitability.
Relationship with Sales Forecasting
A robust sales forecast is the cornerstone of accurate OTB calculations. Forecasting sales with precision is crucial for determining the optimal inventory levels, avoiding stockouts, and managing the purchasing budget. Sales forecasting helps to anticipate future demand, allowing companies to adjust their OTB accordingly. Sophisticated forecasting techniques, coupled with a well-defined OTB strategy, enable businesses to make informed decisions that maximize profitability and efficiency.
Consider, for instance, a company forecasting a significant increase in sales for a specific product line. A well-managed OTB will allow them to proactively increase inventory to meet this anticipated demand, ensuring smooth operations and customer satisfaction.
Comparison of OTB with Traditional Inventory Management
| Feature | Traditional Inventory Management | Open to Buy (OTB) |
|---|---|---|
| Forecasting | Relies on historical data and intuitive judgment. | Uses sophisticated forecasting techniques, including statistical models. |
| Flexibility | Limited ability to adapt to fluctuating demand. | Highly adaptable to changes in sales and market conditions. |
| Cost Control | Prone to overstocking and obsolescence, leading to increased costs. | Minimizes overstocking and stockouts, reducing overall inventory costs. |
| Profitability | Potential for lost sales due to stockouts and reduced profitability. | Increases profitability by optimizing inventory levels and ensuring smooth operations. |
| Decision Making | Reactive approach to inventory management. | Proactive approach, enabling informed decisions. |
Open to Buy and Sales Forecasting
Open to Buy (OTB) is a crucial inventory management tool. It directly connects with sales forecasting, making it a powerful duo for businesses to manage their stock effectively. Understanding the interplay between these two concepts is essential for optimizing inventory levels and ensuring profitability.Sales forecasting and OTB are deeply intertwined. Accurate sales predictions are the bedrock of sound OTB calculations.
This dynamic relationship directly impacts a company’s ability to meet customer demand while minimizing holding costs and the risk of overstocking or stockouts.
The Connection Between OTB and Sales Forecasting
Sales forecasting is the process of estimating future sales. An accurate forecast allows businesses to anticipate demand and adjust their OTB accordingly. By predicting sales, companies can optimize their inventory levels, avoiding overstocking or stockouts. A good forecast leads to a well-managed OTB.
Methods for Incorporating Sales Forecasts into OTB Calculations
Several methods exist for incorporating sales forecasts into OTB calculations. These methods range from simple to sophisticated, depending on the complexity of the business and the available data.
- Historical Data Analysis: Analyzing past sales data is a foundational method. By identifying trends and patterns in historical sales figures, businesses can create more accurate sales forecasts. Tools like moving averages or exponential smoothing can help refine these forecasts.
- Market Research and Analysis: Understanding market trends and competitor activities is crucial. Market research provides insights into potential shifts in demand and allows for adjustments to sales forecasts.
- Expert Opinion and Judgment: In some cases, experienced sales representatives or industry experts can provide valuable insights into future sales trends. Combining expert opinion with historical data and market research creates a more holistic approach.
- Statistical Modeling: Advanced statistical techniques, such as regression analysis, can be used to develop sophisticated sales forecasting models. These models can account for multiple variables and create more precise predictions.
Impact of Sales Forecasting Accuracy on OTB
The accuracy of the sales forecast directly impacts the OTB calculation. Inaccurate forecasts can lead to significant problems.
- Overstocking: An overly optimistic forecast can result in excess inventory, tying up capital and increasing storage costs. This can lead to significant losses from obsolescence or deterioration.
- Stockouts: Conversely, an overly pessimistic forecast can lead to stockouts, resulting in lost sales and dissatisfied customers. This can damage brand reputation and lead to decreased customer loyalty.
Examples of How Inaccurate Forecasts Affect OTB
Consider a retailer forecasting a 10% increase in sales for a particular product line. If the actual sales increase is only 5%, the retailer might overstock, leading to unnecessary holding costs and potential markdowns. Conversely, if the actual sales increase is 15%, the retailer might experience stockouts, impacting sales and customer satisfaction. These scenarios highlight the importance of accurate sales forecasting.
Creating a Sales Forecast Using Historical Data
Using historical sales data to create a sales forecast is a common and effective practice. The process involves identifying patterns and trends in past sales figures. A simple method is a moving average, where the average sales over a specific period (e.g., a month or quarter) is calculated. This average can then be used to predict future sales.
Example: If a store has sold 100 units of a product in each of the last three months, a simple moving average would suggest a forecast of 100 units for the next month. However, more sophisticated techniques might consider factors like seasonality or promotions.
Open to Buy and Inventory Control
Open to Buy (OTB) isn’t just a financial metric; it’s a powerful tool for inventory management. Understanding your OTB allows you to make informed decisions about stocking levels, anticipating demand fluctuations, and optimizing your bottom line. This section dives into the vital role of OTB in controlling inventory and achieving optimal stock levels.OTB provides a crucial link between sales forecasts, projected sales, and the available budget for purchasing new inventory.
It allows businesses to precisely gauge their ability to meet future demands without overspending or facing stockouts. Effective inventory control, guided by OTB, is essential for a healthy cash flow and sustained profitability.
Using OTB to Control Inventory Levels
OTB directly impacts inventory control strategies. By analyzing projected sales against current inventory, businesses can determine the ideal amount of inventory to purchase. This dynamic approach ensures you’re not overstocked, tying up capital unnecessarily, or facing the frustrating reality of running out of essential items.
Strategies for Preventing Stockouts and Overstocking
A well-defined OTB strategy prevents both stockouts and overstocking. To avoid stockouts, businesses can employ proactive forecasting models, incorporating historical sales data, seasonality, and market trends into their predictions. Conversely, overstocking is prevented by aligning purchasing decisions with accurate OTB calculations, ensuring that only the necessary inventory is acquired. This proactive approach reduces holding costs and risk.
Comparing Inventory Control Methods Using an OTB Framework
Different inventory control methods, like the Economic Order Quantity (EOQ) model or Just-in-Time (JIT) systems, can be evaluated and optimized using OTB. The EOQ model, for example, aims to minimize ordering and holding costs, while JIT focuses on minimizing inventory levels. OTB provides a framework for assessing which approach aligns best with current sales forecasts and budget constraints.
Comparing these methods through the lens of OTB allows businesses to fine-tune their inventory control strategies.
The Role of OTB in Optimizing Inventory Turnover
OTB is a critical component in optimizing inventory turnover. A high inventory turnover rate signifies efficient inventory management. By using OTB to manage purchasing and sales forecasts, businesses can achieve the ideal balance between having enough stock to meet demand and minimizing the holding costs associated with excess inventory. This, in turn, contributes to higher profits and increased efficiency.
Potential Impacts of Different Inventory Control Strategies on OTB
| Inventory Control Strategy | Potential Impact on OTB | Description |
|---|---|---|
| EOQ | Improved Inventory Turnover, Reduced Stockouts | EOQ strives for optimal balance between ordering costs and holding costs. This directly affects the OTB figure, potentially leading to a lower OTB as the company purchases inventory in optimal quantities. |
| JIT | Lower Inventory Levels, Increased Flexibility | JIT minimizes inventory, reducing the amount of capital tied up in stock. This results in a lower OTB requirement. |
| ABC Analysis | Prioritization of High-Value Items, Optimized OTB Allocation | ABC analysis categorizes inventory by value, allowing businesses to focus purchasing efforts on high-value items, improving the precision of OTB calculation and allocation. |
| Demand Forecasting | Accurate Sales Projections, Optimized OTB Allocation | Precise forecasting directly influences OTB calculations. More accurate forecasts allow businesses to manage their inventory effectively, avoiding overstocking or stockouts. |
Open to Buy and Pricing Strategies
Open to Buy (OTB) isn’t just about inventory; it’s a vital tool for businesses to make smart pricing decisions. Understanding the relationship between OTB and pricing is key to optimizing profitability and maintaining a healthy inventory. By carefully considering pricing strategies within the context of OTB, companies can make informed choices that drive sales and ensure they’re not overstocked or understocked on products.
Relationship Between OTB and Pricing Decisions
OTB directly impacts pricing decisions, as it reflects the available budget for acquiring more inventory. If OTB is low, a business might need to adjust pricing to encourage sales and free up funds for purchasing new items. Conversely, high OTB might signal the opportunity to consider premium pricing or promotions to move existing stock. This delicate balance is essential for maintaining a successful inventory management strategy.
How OTB Influences Pricing Strategies
OTB can be a powerful tool for influencing pricing strategies. A low OTB often necessitates a shift towards more aggressive promotional pricing, discounts, or clearance sales to clear out existing stock and free up funds. High OTB, on the other hand, offers more flexibility in pricing strategies, allowing for the potential for premium pricing, strategic markups, or even implementing price increases for in-demand items.
This is critical for maximizing profits and maintaining inventory health.
Use of OTB in Promotional Pricing
Promotional pricing, often a component of a successful sales strategy, is heavily influenced by OTB. Understanding the OTB allows businesses to strategically use promotional pricing to move existing inventory without significantly impacting overall profitability. For instance, a low OTB might necessitate deep discounts to encourage immediate sales, while a high OTB might allow for more targeted promotions, such as limited-time offers or bundling deals.
Impact of Pricing Decisions on OTB
Pricing decisions directly affect OTB. Aggressive promotional pricing, while boosting sales in the short term, can reduce the available budget for future purchases. Conversely, premium pricing, while potentially maximizing profits, might lead to slower sales and a higher OTB if the product isn’t moving quickly. The interplay between pricing and OTB is a constant balancing act.
Comparison of Pricing Strategies and Their Effect on OTB
| Pricing Strategy | Effect on OTB | Example |
|---|---|---|
| Promotional Pricing (Discounts, Sales) | Decreases OTB in the short term due to increased sales, but can lead to lower profits if not managed correctly. | A retailer offering 50% off on all winter coats to clear out excess inventory. |
| Premium Pricing | Potentially increases OTB if sales are slow. However, if demand is high, this strategy can lead to higher profit margins. | A luxury car manufacturer setting a high price point for their vehicles. |
| Competitive Pricing | Maintains a stable OTB as it focuses on staying competitive. | A supermarket matching competitor prices on commonly purchased goods. |
| Value Pricing | Maintains a healthy OTB and potentially increases sales due to attractive value propositions. | A furniture store offering high-quality furniture at affordable prices. |
Open to Buy and Financial Planning
Open to Buy (OTB) isn’t just about inventory; it’s a crucial financial tool. Understanding OTB allows businesses to align inventory levels with sales projections, optimizing cash flow and ultimately, boosting profitability. It’s a dynamic concept, constantly adjusting as sales figures and market conditions evolve. This section dives deep into the practical applications of OTB within financial planning.OTB acts as a financial compass, guiding businesses toward a healthy balance of inventory and projected sales.
It’s not just a calculation; it’s a strategy. By incorporating OTB into financial planning, businesses gain a proactive approach to managing their financial health, ensuring they have the right amount of inventory to meet demand without overspending or facing stockouts.
OTB and Cash Flow Management
OTB directly impacts cash flow by influencing how much capital is tied up in inventory. A well-managed OTB ensures sufficient inventory to meet sales forecasts without unnecessary accumulation. This proactive management translates to a more predictable and stable cash flow. Maintaining optimal inventory levels avoids tying up excessive capital, freeing funds for other crucial business needs.
Impact on Profitability Analysis
OTB is intrinsically linked to profitability. By accurately predicting future sales and inventory needs, OTB helps prevent overstocking, which reduces carrying costs and minimizes the risk of obsolete inventory. Analyzing OTB in conjunction with sales data and pricing strategies provides valuable insights into the relationship between inventory, sales, and profit margins. It’s a powerful tool for making informed decisions about inventory levels and pricing adjustments.
OTB in Budgeting
OTB is a vital component of the budgeting process. It enables businesses to create realistic and accurate budgets that reflect anticipated sales and inventory needs. Budgeting with OTB factors in the variable costs of inventory, ensuring a realistic allocation of resources. This ensures that financial projections are not over-optimistic, allowing for flexibility and adaptability to market fluctuations.
Integrating OTB Data into Financial Reports
Integrating OTB data into financial reports provides a comprehensive view of the business’s financial health. Regular OTB analysis and reporting allow for early detection of potential issues and opportunities. For example, a sudden drop in OTB could indicate a need for sales promotions or a potential shift in consumer demand. A clear and concise representation of OTB in financial reports empowers stakeholders with data-driven insights for better decision-making.
This information is crucial for strategic planning, identifying potential risks, and seizing opportunities. The data should be presented in a clear, easily understandable format, such as charts and graphs, in addition to textual summaries.
Open to Buy and External Factors
Open to Buy (OTB) is a crucial tool for managing inventory and aligning it with anticipated sales. However, a static OTB calculation doesn’t account for the ever-shifting sands of the business world. External factors significantly impact sales forecasts, and therefore, necessitate a dynamic approach to OTB management. Understanding how these external forces play a role is paramount to successful inventory control.
Impact of Market Trends on OTB
Market trends, like the sudden surge in popularity of a particular product or the unexpected decline in demand for another, directly affect sales forecasts. Anticipating these shifts is essential for adapting OTB calculations. For example, a retailer anticipating a seasonal surge in demand for swimwear would adjust their OTB to ensure sufficient inventory. Conversely, if a retailer notices a declining trend in sales for a particular product line, they might adjust the OTB to reflect the reduced expected sales.
Understanding and responding to market trends allows for more accurate sales forecasts and optimal inventory management.
Influence of Economic Conditions on OTB
Economic conditions play a major role in shaping consumer spending patterns. Recessions, inflation, and other economic fluctuations directly impact consumer confidence and purchasing power. During periods of economic uncertainty, consumers tend to cut back on discretionary spending, which can significantly affect sales forecasts and necessitate adjustments to OTB. Conversely, robust economic conditions often lead to increased spending, prompting retailers to adjust their OTB to accommodate the anticipated rise in demand.
Comparison of Economic Scenarios on OTB
Different economic scenarios necessitate varying approaches to OTB management. Consider a period of sustained economic growth versus a recession. In a growth period, retailers might anticipate higher sales and adjust OTB to meet increased demand. During a recession, sales forecasts might need to be lowered, prompting a decrease in the OTB to avoid overstocking. These adjustments ensure that inventory levels remain aligned with expected sales, regardless of the prevailing economic climate.
Examples of External Factors Affecting OTB Calculations
External factors, such as natural disasters, political instability, or supply chain disruptions, can also influence OTB. A hurricane affecting a region might lead to a temporary halt in sales for certain products, necessitating a revision of OTB to reflect the expected reduction in demand. Similarly, a significant disruption in the supply chain, like port closures, could lead to delays in receiving goods, prompting retailers to adjust their OTB to accommodate the potential shortage.
In each case, OTB is crucial for adapting to these unforeseen circumstances and ensuring inventory aligns with current sales expectations.
Case Studies and Illustrative Examples
Let’s imagine a sporting goods retailer. During the Olympics, the demand for specific athletic gear skyrockets. The retailer, anticipating this surge, would likely increase their OTB to ensure sufficient inventory. Conversely, if there’s a downturn in the economy, the retailer might adjust their OTB downward to reflect the anticipated decrease in consumer spending. These adjustments highlight the dynamic nature of OTB and its dependence on external factors.
Open to Buy and Customer Demand
Understanding customer demand is crucial for effective inventory management. Open to Buy (OTB) directly interacts with this demand, influencing purchasing decisions and ensuring optimal stock levels. Fluctuations in customer preferences and buying patterns can significantly impact OTB calculations, necessitating agile adjustments to maintain profitability and meet customer expectations.
Impact of Customer Demand on OTB
Customer demand is the lifeblood of any business. A strong understanding of how this demand evolves is essential for successful OTB management. Changing customer preferences, emerging trends, and seasonal variations all play a pivotal role in shaping inventory needs. This, in turn, directly impacts the Open to Buy figure.
Methods for Analyzing Customer Demand Patterns
Analyzing customer demand patterns involves several key methods. Sales data analysis is fundamental, revealing trends and seasonality. Market research provides insights into customer preferences and anticipated future demand. Customer feedback, whether through surveys or reviews, offers valuable insights into current satisfaction levels and potential shifts in demand.
Examples of Fluctuating Customer Demand Affecting OTB
Consider a retailer selling winter coats. High demand during the colder months necessitates a significant OTB to replenish stock. Conversely, low demand during the summer months requires a lower OTB, preventing overstocking. A sudden increase in demand for a specific product, perhaps due to a viral social media trend, will immediately affect the OTB, demanding proactive adjustments to avoid stockouts.
These examples highlight the dynamic relationship between demand and OTB.
Strategies for Anticipating and Managing Changing Customer Demand
Anticipating and managing changing customer demand requires a proactive approach. Implementing robust sales forecasting models is essential to predict future demand. Monitoring competitor actions and industry trends allows for early identification of potential shifts in demand. Furthermore, maintaining strong communication channels with suppliers and distributors enables swift adjustments to inventory levels. Regular market research and customer feedback collection also help adapt to evolving preferences.
Visual Representation of the Relationship Between Customer Demand and OTB
Imagine a graph with two axes: the horizontal axis representing time, and the vertical axis representing the Open to Buy (OTB) amount. Plot points that correspond to varying customer demand levels throughout the year. The graph would show how the OTB fluctuates with the ups and downs of customer demand. High demand periods are marked by a higher OTB to replenish stock.
Low demand periods show a lower OTB to prevent overstocking. The graph clearly visualizes the dynamic relationship between customer demand and the amount available for purchasing.
