CHB, Inc., is a bank holding company that is evaluating the potential for expanding into a 13-county region in the southwestern part of the state. State law permits establishing branches in any county that is adjacent to a county in which a PPB (principal place of business) is located. The following map shows the 13-county region, with the population of each county indicated:

a. Assume that only one PPB can be established in the region. Where should it be located to maximize the population served?
b. Suppose that two PPBs can be established in the region. Where should they be located to maximize the population served?
c. Management learned that a bank located in county 5 is considering selling. If CHB purchases this bank, the requisite PPB will be established in county 5, and a base for beginning expansion in the region will also be established. What advice would you give the management ofCHB?

Transcribed Image Text:

195,000 87,000 96,000 7 117.000 4 52,000 57,000 233,000 88,000 95.000 106,000 10 76,000 13 175,000 12 323.000