When you lease 800 phone numbers from AT&T for telemarketing, AT&T uses an optimization 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 seven calling center locations: Boston, New York, Charlotte, Dallas, Chicago, Los Angeles, and Omaha. You know the average cost (in dollars) incurred if a telemarketing call is made from any these cities to any region of the country. This information is listed in the table below.

Assume that an average call requires 4 minutes of labor. You make calls 250 days per year, and the average number of calls made per day to each region of the country is provided in the attached spreadsheet.

The cost (in millions of dollars) of building a calling center in each possible location and the hourly wage that you must pay workers in each city is listed in the table Each calling center can make up to 5000 calls per day.

Given this information, you want to minimize the discounted cost (at 10% per year) of running the telemarketing operation for 10 years. Assume all wage and calling costs are paid at the ends of the respective years.

Call Center
Days per year	250
Minutes per call	4
Max calls / day	5000
Interest rate	10%
Years	10
		Cost/call
		New England	Middle Atlantic	Southeast	Southwest	Great Lakes	Plains	Rocky Mountains	Pacific	Hourly wage	Bldg cost ($MM)
	Boston	1	1	1	3	2	2	3	2	14	3
	New York	1	1	1	2	2	2	3	3	16	3
	Charlotte	2	1	1	2	2	2	3	3	11	2
	Dallas	2	2	1	1	2	2	2	3	12	2
	Chicago	2	2	2	2	1	1	1	2	13	2
	LA	3	2	2	1	2	2	1	1	18	4
	Omaha	2	2	2	1	1	1	1	2	10	2
	Required	1000	2000	2000	2000	3000	1000	2000	4000

Question:

• Formulate the problem as an integer program and implement the model in the spreadsheet.

[Hint: Once you figure out the total operating cost for one year. You would need to compute the "net present value." As building the call center is a long-term investment, you would like to know what is the total operating cost over 10-year period. The formula you need to use is PV(interest rate, number of years, cash flow). Here, interest rate is 10%, number of years is 10, and cash flow is the annual operating cost of the call center based on the solution from the model]