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Strategic Expansion of Ohio Trust Company in Northeast Ohio

The long-range planning department of Ohio Trust Company is evaluating expansion into a 20-county region in NE Ohio without a current principal place of business. To establish a new PPB, approval from the state’s superintendent of banks or purchase of an existing bank is required. The objective is to minimize the establishment of PPBs in the specified counties. The decision variables are assigned based on the establishment of a PPB in each county. Constraints are set to ensure the establishment of PPBs in particular counties.

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Strategic Expansion of Ohio Trust Company in Northeast Ohio

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  1. Bank Location Team 3

  2. Bank Location • The long-range planning department for the Ohio Trust Company is considering expanding its operation into a 20-county region in NE Ohio. Currently, Ohio Trust does not have a principal place of business in any of the 20 counties. According to the banking laws in Ohio, if a bank establishes a principal place of business (PPB) in any county, branch banks can be estd in that county and in any adjacent county. However, to establish a new PPB, Ohio Trust must either obtain approval for a new bank from the state’s superintendent of banks or purchase an existing bank.

  3. Decision variables Let xi= 1 if a PBB is estd in county i; 0 otherwise • Objective Function Minimise: Z= x1+x2+x3.,.,.x20 • Subject to: x1 + x2 + x12 + x16 >= 1 (Ashtabula) x1 + x2 + x3 + x12 >= 1 (Lake) . . x11 +x14 +x19 +x20 >= 1 (Carrol) • Non-negativity Xi = 0,1 i = 1,2,.,., 20

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