Which of the following scenarios best illustrates the need for an OTB plan?

An Open-To-Buy (OTB) plan is a crucial tool for inventory management, particularly in retail settings, as it helps retailers maintain optimal stock levels while aligning with sales projections. The first scenario illustrates the need for an OTB plan perfectly because it involves using past sales data to forecast future inventory needs. This approach allows a retailer to determine how much inventory they should buy to meet anticipated demand without overstocking or understocking.

By analyzing historical sales data, a business can identify trends, seasonality, and patterns that inform purchasing decisions. An effective OTB plan ensures that the right products are available at the right time, optimizing cash flow and minimizing markdowns or stockouts. This proactive planning enables a retailer to stay responsive to market demands and customer preferences.

Other scenarios presented, such as increasing advertising in response to sales drops, conducting employee performance reviews, and evaluating customer satisfaction surveys, do not directly address the systematic financial and inventory management challenges that an OTB plan aims to solve. While they are important aspects of overall business strategy, they don't inherently involve inventory planning based on sales data, which is the essence of an OTB plan.