Aquaguard manufactures three models of water purifiers in three separate plants in Taiwan. These plants serve the demand in Europe. All three models sell at a unit price of $100 and the holding cost is 5% of the selling price per month. The monthly demand for these models is normally distributed with the following parameters:

Model 1: Mean 1000, SD 300

Model 2: Mean 1000, SD 300

Model 3: Mean 1000, SD 300

The demand for Model 1 and Model 2 has a correlation coefficient of -0.35, while that for Model 3 is independent of the other two models.

Consider Aquaguard's distribution in Europe. They have a central DC that caters to the European market. The lead time from Taiwan to their DC is 2 months and orders are placed every month.

Aquaguard has the option of redesigning its products. It can develop a "base" product B and ship it to the DC. The base product can then be customized into any one of the Models and sold (delayed differentiation). The company chooses to redesign Models 1 and Models 2 while Model 3 remains untouched. The lead time, the in-stock target level and the ordering policies remain the same. What is the difference in total end-of-period inventory when using delayed differentiation versus not?

Answer choices = 724 units less, 824 units less, 924 units less, 1024 units less