Solved: Hoosier Services recently celebrated its 10th anniversary as a professional services firm

Hoosier Services recently celebrated its 10th anniversary as a professional services firm that handles investigations for law firms offering amenities, such as background checks, surveillance, interviewing of witnesses, crash scene investigation, and other related services.
The company was founded by Lee Herbert who had extensive experience working for companies that handle investigative work. Herbert is more of a people person and is always looking for the next new client to take on. Admittedly, Herbert had no experience in running a business when he decided to go out on his own and enlisted the help of his long time friend, Bradley Simmons.
Simmons has spent his career working for larger corporations in finance and had no experience in
investigative services, but was looking for a change.
Over the 10 years since the company’s founding, Hoosier Services struggled at first but slowly grew over the last five years. The more law firms the company works with, the more cases they receive. The more cases they receive, the more hours they can bill. Hoosier currently has six investigators and two clerks in addition to Herbert and Simmons.
Over the years, they have expanded and contracted based on the volume of business and the local
economy. Based in Indianapolis, Indiana, Herbert is really interested in expanding the business to other major cities in the region, believing that there are only so many law firms here in Indianapolis. He feels that if they’ve survived 10 years, then they should continue to focus on growing the business. Simmons, on the other hand, feels that expansion will put the company at risk as it takes time to develop a decent client base. They opened a second office several years back across town but eventually closed it when it didn’t generate enough revenue to cover expenses. He’s worried the expansion may bankrupt the company. Even though the two are business partners, Herbert is the president and Simmons the vice president.
Herbert asked Simmons to evaluate several options to further expand the business. From Herbert’s
perspective, he has concluded that three objectives are important in this decision. First, is to find a city with a large number of Fortune 500 companies, a cost of living comparable to Indianapolis, and a city that is in a reasonable distance from Indianapolis as he and Simmons would be spending a lot of time in the new office at first. Because both have families with young children, Herbert feels that the distance is twice as important as the other criteria.
Here is the summary of Simmons’ research.
I. Chicago, Illinois: Number of Fortune 500 Companies: 8; Cost of Living Comparison: 1.045 (more than Indianapolis); Driving Distance: 159 miles
II. St. Louis, Missouri: Number of Fortune 500 Companies: 8; Cost of Living Comparison: 0.809 (less than Indianapolis); Driving Distance: 461 miles III. Milwaukee, Wisconsin: Number of Fortune 500 Companies: 5; Cost of Living Comparison: 0.910 (less
than Indianapolis); Driving Distance: 239 miles
1. Define the decision problem and the general nature of the problem.
2. What event triggered the situation?
3. Are we imposing any implied constraints on the situation?
4. Define the objectives.
5. Identify the alternatives.
6. Compare and contrast the consequences for all three alternatives by the fundamental objectives. Rank each alternative using proportional scoring, include weights on the objectives. Are there any dominated alternatives that can be eliminated? Are there any even swaps?
7. What decision-making styles are at work here? What is their attitude towards risk?
8. Are there any biases in play here that may impact the effectiveness of the decision?
9. What are the uncertainties for this decision situation? What are their consequences?
10. Evaluate this decision situation using tradeoffs. What location should they select? Are there any linked decisions? Discuss any assumptions as needed.

Expert Answer

Answer-1 Decision problem is looking out for expansion & exploring the opportunity where in more Fortune 500 companies are triggered & also the considering the factors of cost of living & driving distance as they both have the families. Nature of the problem includes that less distance must be covered & there must be a good scope of expanding the business.

Answer-2 It happened in past that offices of Hoosier Services are expanded in various cities & all were closed due to not maintaining the data base & company was in loss so it was decided that proper study to be done before starting the expansion plan & for that some of the databases have been collected.

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Answer-3 Yes, there are few constraints which need to be taken care as the cities must have good number of Fortune 500 companies so that client database can be maintained & services to be offered. Along which, travelling distance also needs to be taken care of.

Answer-4 Objectives are –

  1. Choosing the city where more & more Fortune 500 companies are there
  2. A cost of living must not be very high
  3. Distance must not be very much from Indianapolis

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