There's no need to put the database on SQL Server, it can be used as a LocalDB in Visual Studio. I'm sending my project again - I've made some small changes when getting items from DB (now items, that are already selected will not be included in the filtered result shown in the drop down) and I've added required EntityFramework dll to the project. You can try the new attachment and see if it works on your side (you'll have to add references to Telerik dlls).
Hope this helps.
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