3 What are the alternatives Scott Davis should consider 10 Switch from VARS to

3 what are the alternatives scott davis should

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3.What are the alternatives Scott Davis should consider? (10%)Switch from VARS to Direct distribution: Under this alternative, 3M should invest in providing EDI services for hospitals. Providing hospitals with the opportunity to place their orders via EDI would decrease the intensification of labor that would occur in customer service under the direct distribution model. Also, 3M should consider providing customers (hospitals), the option of ordering smaller lot sizes, and not just full cases.
Remain status quo: Hospitals already have the choice to pick between VARS and the direct distribution model, if they are unhappy they can switch.4.A Scott Davis, what recommendations would you make to Matt Pepe? What arguments would you present to support your recommendation? (40%)Switch from VARS to Direct distribution: Don’t switch, because inventory levels would have to increase. 3M would have to invest in EDI for hospitals. Overall all of 3M’s costs will increase including inventory, transportation, customer service, fulfillment and warehouse handling.Remain status quo – This is the recommended option because switching over a direct distribution model would significantly increase costs. Under the current model, VARS provide EDI services that 3M doesn’t have to pay for, in addition to other value added services.

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