(CMA) A regional government agency serves a nine-county area with small offices located in each of the nine counties. Each office is responsible for acquiring and storing operating supplies used in the respective county. Therefore, each office has leased warehouse space and has one employee in charge of purchasing, warehousing, and record keeping for the supplies.

The services provided by the governmental unit have increased substantially over the past ten years. Consequently, the use of supplies has increased greatly. Total acquisition cost of supplies reached $5.2 million during fiscal 1992. Because the activity relating to operating supplies has becomes so large, agency management is considering establishing a central purchasing and warehousing function for the nine-county area. Currently, the total invento- ries for all nine county warehouses average $600,000 during a month. The offices pay from $2.10 to $3.25 per square foot for warehouse space. The total expenditures for warehouse facilities for fiscal 1992 amounted to $275,000. Utilization of warehouse space averaged 60 percent of leased space for all offices and ranged from 45 to 70 percent in the individual cases.

The office in the extreme southwest portion of the nine-county region appears to be the most likely choice for locating the central warehouse and purchasing function at this time. The greatest volume of operating supplies of all offices is used in this county. Warehouse space which should be adequate for the entire nine-county region is available because the present facility for this county, only partially leased at the present time, can be leased in its entirety. In addition, the rental fee would drop from $2.85 per square foot to $2.40 per square foot.

The agency is preparing a detailed analysis to be used to reach the decision whether to continue with the present system or centralize the purchasing and warehousing function. Identify and briefly justify the specific economic data the agency should accumulate for this analysis. In addition to the economic data, what qualitative factors should the governmental unit consider before the decision is made?