2. PRODUCTION ACTIVITIES
Significant production reductions were realized which resulted in measurable savings in the stamp production budget.

• Stamp production was able to reduce the inventory carry-over of rate-change transitional stamps by approximately 54.8 percent, between the September 24, 2001, rate case filing and the June 30, 2002, rate implementation. As of September 19, 2002, stamp distribution offices had approximately 228.491 million stamps in inventory. By comparison, for the last rate cycle in which alpha stamps were used (1999), the inventory carry-over for the H stamps was 4.113 billion stamps. The current carry-over represents a 94.44 percent reduction from the 1999 totals and an overall saving of $12 million dollars.
• Additional savings have been realized by competitively bidding many of the commemorative stamp issues among the private supplier base. An overall cost reduction of 16 cents per thousand was attained which resulted in a savings of $3.5 million compared to costs in 2001. In addition, by reducing the stamp commitment to the Bureau of Engraving and Printing we have reduced an additional $6.5 million from 2001 cost.
• The Postal Service successfully met all stamp production and distribution commitments for both the commemorative and definitive stamp programs.