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George Mason’s bookstore currently stores inventory of notebooks at both the Arlington and Fairfax campuses. They use a continuous replenishment policy for each assuming annual demand at each campus is independent and normally distributed with a mean of 5,878 and a standard deviation of 593. If they pool the inventory into a single location (or virtually pool it), what will be the reduction in total inventory (a positive number). Assume a safety factor z of 1.5. (Hint: calculate the current ROP for each warehouse, then calculate the new ROP for the combined warehouse using the pooling principle. See the example in the slides. Assume leadtime = 1 and doesn't change) Round your answer to the nearest integer.

Operation Management, Management Studies

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