Case Problem NEW OFFICES AT ATLANTIC MANAGEMENT Prospective Setup Cost Staffing Needs SYSTEMS Office ($1,000,0005) (employees) 1. Atlanta $1.7 Atlantic Management Systems is a consulting firm that 2. Boston 3.6 14 specializes in developing computerized decision support 3. Denver 2.1 8 systems for computer manufacturing companies. The firm 4. Detroit 2.5 12 currently has offices in Chicago, Charlotte, Pittsburgh, and 5. Miami 3.1 11 Houston. It is considering opening new offices in one or 6. St. Louis 2.7 7 more cities-including Atlanta, Boston, Washington, DC, St. Louis, Miami, Denver, and Detroit-and it has $14 mil- 7. Washington, DC 4.1 18 lion available for this purpose. Because of the highly spe- cialized nature of its high-tech consulting work, the firm The numbers of employees available for transfer from must necessarily staff any new offices with a minimum each of the current offices are as follows: number of its employees from its existing offices. However, it has a limited number of employees available to trans- Existing Office Available Employees fer to any new offices. In addition, the cost of transferring employees depends on the city they are leaving and the city Chicago 24 to which they might move. Charlotte 19 Following are the costs for opening a new office in each Pittsburgh 16 of the prospective cities and the start-up staffing needs at Houston 21 each office: The costs (in thousands of dollars) of transferring an employee from an existing office to a new office differ according to housing costs and moving expenses plus cost of living adjustments. They are as follows: Prospective New Offices (costs, $1,000s) Current Office 1. Atlanta 2. Boston 3. Denver 4. Detroit 5. Miami 6. St. Louis 7. Washington, DC 1. Chicago $19 $32 $27 $14 $23 $14 $41 2. Charlotte 14 47 31 28 35 18 53 3. Pittsburgh 16 39 26 23 31 19 48 4. Houston 22 26 21 18 28 24 43CASE PROBLEM 233 The firm has ranked the possible new offices according In addition, the firm wants at least one new office in the to their profit potential, with Washington, DC, being the best Midwest (i.e., Detroit and/or St. Louis) and one new office (i.e., greatest potential), as follows: in the Southeast (i.e., Atlanta or Miami). Formulate and solve an integer programming model New Office Rank to help Atlantic Systems determine how many new offices it should open, where they should be located, and how to Washington, DC transfer employees. Miami 2 Atlanta w Boston Denver UI St. Louis O Detroit