The underlying assumption of the case does not make sense. Nationwide branching has been available in the United States since 1997. The Regal-Neal act gave states the right to opt out of nationwide branch banking within a limited period of time and Texas and Montana did so. In 1999 Texas reversed its position and Montana is not relevant to this case. (Gilbert) The obvious solution would be for the company to select a bank that had branches or correspondents in each of the communities in which in does business, and has a cash management program for its commercial clients. In the unlikely event that there was one or more communities that did not have a bank with which the company's selected bank could negotiate a relationship this could be handled as an exceptional case and a solution devised. In practice, it is likely that there would be several banks competing for the account and the bank offering the most effective solution would become the real management decision.
In this scenario the only change is the day on which deposits are shifted. "However, he was not sure how this would impact the average daily collected balances..." In the world of 21st century banking there are two elements that make little sense. The first is why is the treasurer allowing the local managers make a decision that directly impacts the area of responsibility of the treasurer of a company with 50 outlets in four states. Having accounts in 50 different local banks where the company is treated more or less as a retail client is ridiculous.
The second is why he has a problem in determining how this would impact his average collected balance in each of these banks. A few hours work with a spreadsheet program should resolve this question. Clearly, having a higher balance in the master account where interest is collected is advantageous. If the decrease in the average balance in the local accounts increased the total banking expense, more reaso...