On Time Modern Carriers is a Third Generation Logistics provider in the supply chain network. They have been contracted by several entities in the supply chain to oversee transportation of goods. They have received a lot of business due to their reliability however their reputation has suffered some damage due to several late deliveries. They have focused on Rail, Air and Water to cover transportation over longer distances but have subcontracted transportation by trucks to cover the road requirements of the transportation network. The manager of On Time Modern Carriers are considering ways to maintain their reputation as their business grows. The company is considering the following network options for a client whose business is growing substantially:

i. Direct Shipment

ii. All shipments Via Central DC:

iii. Direct Shipments with Milk Run

The client is keen to avoid exorbitant costs but at the same time would like fast access to items needed.

Required: Explain the relative merits and drawbacks of the above options. Advise the client regarding the preferred network option.