DECA Buying and Merchandising Practice Exam 2025 - Free DECA Exam Practice Questions and Study Guide

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What term describes the amount of merchandise a buyer needs to order to support planned sales?

Stock Level

Open-to-Buy

The correct term that describes the amount of merchandise a buyer needs to order to support planned sales is referred to as open-to-buy. Open-to-buy is essentially a financial budget that defines how much inventory can be purchased without exceeding the planned sales and maintaining the desired inventory levels. This method helps retailers manage their stock efficiently, ensuring that they have enough products to meet customer demand while avoiding overstock situations that could lead to markdowns and reduced profit margins.

The concept of open-to-buy allows retailers to make informed purchasing decisions based on current sales trends, seasonality, and inventory levels. It effectively balances the need for inventory with the liquidity requirements of the business, ensuring that funds are not tied up excessively in unsold merchandise. This thoughtful approach to inventory management is crucial for maximizing profitability and operational efficiency in retail environments.

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Inventory Requirement

Purchase Order

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