Answer the given question with a proper explanation and step-by-step solution. SC consulting, a supply chain consulting firm, must decide on the location of its home office. Its clients are located primarily in the 16 states listed in the Table provided. These are four potential sites for home offices: Los Angeles, Tulsa, Denver, and Seattle. The annual fixed cost of locating an office in Los Angeles is $165,428, Tulsa is $131,230, Denver is $140,000, and Seattle is $145,000. The expected numbers of trips to each state and the travel costs from each potential site are shown in Table. Each consultant is expected to take at most 25 trips each year. a. If there are no restrictions on the number of consultants at a site and the goal is to minimize costs, where should the home offices be located and how many consultants should be assigned to each office? What is the annual cost in terms of the facility and travel? b.    If, at most, 10 consultants are to be assigned to a home office, where should the offices be set up? How many consultants should be assigned to each office? What is the annual cost of this network? c.    What do you think of a rule by which all consulting projects out of a given state are assigned to one home office? How much is this policy likely to add to cost compared to allowing multiple offices to handle a single state?

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Answer the given question with a proper explanation and step-by-step solution.

SC consulting, a supply chain consulting firm, must decide on the location of its home office. Its clients are located primarily in the 16 states listed in the Table provided. These are four potential sites for home offices: Los Angeles, Tulsa, Denver, and Seattle. The annual fixed cost of locating an office in Los Angeles is $165,428, Tulsa is $131,230, Denver is $140,000, and Seattle is $145,000. The expected numbers of trips to each state and the travel costs from each potential site are shown in Table. Each consultant is expected to take at most 25 trips each year.

a. If there are no restrictions on the number of consultants at a site and the goal is to minimize costs, where should the home offices be located and how many consultants should be assigned to each office? What is the annual cost in terms of the facility and travel?

b.    If, at most, 10 consultants are to be assigned to a home office, where should the offices be set up? How many consultants should be assigned to each office? What is the annual cost of this network?

c.    What do you think of a rule by which all consulting projects out of a given state are assigned to one home office? How much is this policy likely to add to cost compared to allowing multiple offices to handle a single state?

#
State
Washington
Oregon
California
Idaho
Nevada
Montana
Wyoming
Utah
Arizona
Colorado
New Mexico
Nebraska
Kansas
Total #
of trips
Oklahoma
40
35
100
25
40
25
65
40
North Dakota
30
South Dakota 20
30
50
30
50
40
55
Cost
from LA
150
150
75
150
100
175
150
150
75
150
125
300
300
250
250
250
Cost
from
Tulsa
250
250
200
200
200
175
175
150
200
125
125
200
175
100
75
25
Cost
From
Denver
200
200
150
125
125
125
100
100
100
25
75
150
125
125
75
125
Cost
from
Seattle
25
75
125
125
150
125
150
200
250
250
300
200
200
250
300
300
Transcribed Image Text:# State Washington Oregon California Idaho Nevada Montana Wyoming Utah Arizona Colorado New Mexico Nebraska Kansas Total # of trips Oklahoma 40 35 100 25 40 25 65 40 North Dakota 30 South Dakota 20 30 50 30 50 40 55 Cost from LA 150 150 75 150 100 175 150 150 75 150 125 300 300 250 250 250 Cost from Tulsa 250 250 200 200 200 175 175 150 200 125 125 200 175 100 75 25 Cost From Denver 200 200 150 125 125 125 100 100 100 25 75 150 125 125 75 125 Cost from Seattle 25 75 125 125 150 125 150 200 250 250 300 200 200 250 300 300
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