When you lease 800-phone numbers from AT&T for telemarketing, AT&T uses a Solver model to…

When you lease 800-phone numbers from AT&T for telemarketing, AT&T uses a Solver model to tell you where you should locate calling centers to minimize your operating costs over a 10-year horizon. To illustrate the model, suppose you are considering 7 calling center locations: Boston, New York, Charlotte, Dallas, Chicago, L.A., and Omaha. We know the average cost (in dollars) incurred if a telemarketing call is made from any of these cities to any region of the country. We also know the hourly wage that we must pay workers in each city (see Table 120).
We assume that an
When you lease 800-phone numbers from AT&T for telemarketing, AT&T uses a Solver model to tell you where you should locate calling centers to minimize your operating costs over a 10-year horizon. To illustrate the model, suppose you are considering 7 calling center locations: Boston, New York, Charlotte, Dallas, Chicago, L.A., and Omaha. We know the average cost (in dollars) incurred if a telemarketing call is made from any of these cities to any region of the country. We also know the hourly wage that we must pay workers in each city (see Table 120).
We assume that an average call requires 4 minutes. We make calls 250 days per year, and the average number of calls made per day to each region of the country is shown in Table 121.The cost of building a calling center in each possible location is in Table 122. Each calling center can make as many as 5,000 calls per day. Given this information, how can we minimize the discounted cost (at 10% per year) of running the tele-marketing operation for 10 years? Assume all wage and calling costs are paid at the end of each year.

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