Adjusting an open-to-buy plan when actual sales beat or miss forecast

This page explains how a retailer adjusts its own open-to-buy plan once real sales come in above or below forecast

This page is for a domestic retail buyer who has to react to real sales data once a season's own plan is already running. At work, a buyer who leaves a WSSI untouched after sales beat forecast can run out of stock before the season ends, while a buyer who leaves it untouched after sales miss forecast can end the season holding stock nobody planned to keep. This lesson mainly teaches the decision flow: it shows how a buyer measures the size of a forecast variance, then decides whether the remaining open-to-buy can cover the reorder that variance calls for.

Cedar & Co., a local domestic brand that reorders its own T-shirt category from Delta Garments on 60-day open account, forecast 700 pieces of sales per week for the season's first two weeks. Actual sales came in at 950 pieces per week instead. Without this skill, Omar, the owner, might leave the original reorder plan unchanged, only to find the shops running low on stock well before the next planned delivery.

What you need, and what this lesson does not cover

You need: lesson T20-C02-L02, which shows how a season's own targets become a week-by-week WSSI.

By the end of this lesson you can:

• calculate a forecast variance as actual sales minus planned sales;
• decide when a variance is large enough to justify an extra reorder;
• check a reorder's own cost against the open-to-buy that remains;
• explain why a beaten forecast still has to be checked against open-to-buy, not reordered automatically;
• state what happens to a WSSI's own future weeks once a variance is confirmed.

Not covered here: committing new stock against open-to-buy without overbuying (lesson T20-C02-L04) and assembling a complete open-to-buy and WSSI worksheet (lesson T20-C02-L05).

Words you will meet in this lesson

A forecast variance is only acted on once it is checked against the open-to-buy that remains, in either direction

A retailer compares actual sales against its own forecast every week, and any gap between the two is a variance, whether sales beat forecast or missed it. A variance in either direction changes how much stock cover the retailer actually has left, but it never changes the season budget itself. Before placing an extra reorder to chase strong sales, or cancelling a planned reorder because sales are weak, a buyer checks whether the remaining open-to-buy can still support the new decision.

A retailer meets a forecast variance in either direction, and each shape calls for a different response

A buyer meets several shapes of variance across a normal working year, and reading the shape correctly stops a reaction that fits one direction being applied wrongly to the other.

Omar checks whether Cedar & Co.'s remaining open-to-buy can cover the reorder a strong first two weeks call for

Cedar & Co. forecast 700 pieces of sales per week for the season's first two weeks, worth 1,400 pieces planned. Actual sales came in at 950 pieces per week, 1,900 pieces actual, a variance of 500 pieces above forecast. Reordering those 500 extra pieces from Delta Garments, at Cedar & Co.'s own buying cost of USD 8.00 per piece, would cost USD 4,000. Cedar & Co.'s season budget for this category is USD 40,000, with USD 22,000 already committed, leaving USD 18,000 of open-to-buy before this reorder.

The reorder a beaten forecast calls for still fits inside Cedar & Co.'s own remaining open-to-buy

The USD 4,000 reorder comfortably fits inside the USD 18,000 open-to-buy Cedar & Co. has left, leaving USD 14,000 still free to commit to other styles later in the season. Omar can place the reorder without a season budget increase, but the remaining open-to-buy for any further reorders this season is now USD 14,000, not the original USD 18,000.

Five steps a buyer follows once real sales data starts coming in against a WSSI

1. Compare actual sales against planned sales for the period just completed, in either direction.
2. Calculate the variance as actual minus planned, keeping the sign so a beat and a miss are never confused.
3. Judge whether the variance is large enough to justify a reorder or a reduction, not every small variance calls for action.
4. Check the reorder's own cost against the open-to-buy that remains before placing it with the factory.
5. Update the WSSI's own future weeks so later decisions start from the corrected stock position, not the original forecast.

A common mistake is reordering to match strong sales without first checking the reorder's own cost against open-to-buy

A common mistake is a buyer reordering enough stock to match a beaten forecast exactly, without first checking whether that reorder's own cost fits inside the open-to-buy that remains. A strong two weeks of sales does not create extra season budget on its own; it only shows that stock is moving faster than planned. What this costs a retailer that gets it wrong is real: a buyer who reorders first and checks the budget afterward can discover the reorder itself has used up open-to-buy a later, better-timed style needed, turning one style's own strong sales into a shortage somewhere else in the season.

• A variance is actual sales minus planned sales, kept with its sign.
• A variance that beats forecast shrinks stock cover faster than the WSSI assumed; a variance that misses forecast builds stock cover beyond it.
• A beaten forecast does not create extra open-to-buy; the reorder it calls for still has to fit inside what remains.
• A reorder's own cost is checked against remaining open-to-buy before it is placed with the factory.
• An export Make to Order order often absorbs a variance in a later season phase, rather than an immediate extra reorder.
• Updating the WSSI's own future weeks after a variance keeps later decisions based on the corrected stock position.

Omar must decide whether to reorder against Cedar & Co.'s own strong first two weeks of sales

Cedar & Co. forecast 700 pieces of sales per week for the season's first two weeks and actually sold 950 pieces per week. Reordering the 500-piece variance from Delta Garments would cost USD 4,000 at Cedar & Co.'s own buying cost of USD 8.00 per piece. Cedar & Co.'s season budget for this category is USD 40,000, with USD 22,000 already committed elsewhere.

Here is the note Omar actually wrote to his own buying team:

Can Omar place the 500-piece reorder without a season budget increase? Decide before opening the answer.

Open-to-buy and WSSI worksheet: check a reorder's own cost against remaining open-to-buy once real sales come in

Open the course workbook's "Open-to-buy" sheet. Enter the reorder's own required spend once a variance is confirmed; the sheet calculates whether it fits inside the open-to-buy that remains and shows the updated balance for any further reorder later in the season.

[Download the Open-to-buy and WSSI worksheet](../../templates/T20-C02-open-to-buy-and-wssi-worksheet.xlsx)

Download the Open-to-buy and WSSI worksheet (Excel)

Lesson 2.4: Committing new stock against open-to-buy without overbuying

You now know how to adjust an open-to-buy plan once real sales beat or miss forecast. The next lesson shows how to commit new stock against the open-to-buy that remains, without overbuying beyond it. Back to the course map