Budget planning in buying and merchandising is the process of estimating sales, purchases, expenses, stock requirements, and profits for a particular period. It helps a retailer allocate financial resources efficiently and maintain an appropriate balance between sales opportunities and inventory investment. A well-prepared budget enables the buyer and merchandiser to make planned purchasing decisions and control costs. The first step is to establish objectives. The retailer determines what the business wants to achieve during the budget period, such as increasing sales, improving gross margin, reducing inventory, or expanding a product category. For example, a fashion retailer may set an objective of increasing women’s wear sales by 15% during the coming season. The second step is sales forecasting. Past sales records, market trends, consumer preferences, seasonal variations, economic conditions, and promotional plans are analysed to estimate future sales. For example, if a retailer sold ₹20 lakh worth of winter garments last year and expects a 10% increase in demand, the planned sales may be estimated at ₹22 lakh. The third