Directorate of distance education

Supplier 
Destination 
Point 
Plant 1 
Plant 2 
Plant 3 
Plant 4 
Customer A 
Customer D 
Customer C 
Customer B 
Plant 1 
Plant 2 
Plant 3 
Plant 4 
Customer A 
Customer D 
Customer C 
Customer B 
a
b
Direct Shipments via Distribution Centre

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Notes
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Direct Shipments via Distribution Centre
This transportation network is the modification of direct shipment 
network, in which goods are delivered to customers via a central 
distribution centre. In other words, first goods from various plants of 
the supplier are consolidated at a central distribution centre/warehouse 
and then delivered to individual customer individually as shown in Fig. 
For instance, Mahindra & Mahindra Ltd., ships its tractors from Mumbai 
and Nasik plants to various stock-yards all over the country by railways 
normally and from the stock-yards to dealers directly by road to achieve 
economies of scale in transportation costs.
Supplier 
Destination Point 
Plant 1 
Plant 2 
Plant 3 
Customer A 
Customer C 
Customer B 
Distribution 
Centre 
Direct Shipment via Distribution Centre
The main advantage of this design is lower plant-to-warehouse 
transportation cost by bulk transportation and consolidation as well as 
ensures better customer service by lowering inventory requirement at 
customer’s end resulting into better return to them. On the other hand, it 
also results into higher logistical costs due to increased inventory cost and 
warehousing infrastructure and facility costs to the company.