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.