Optimal ATM replenishment policies under demand uncertainty

Name: Optimal ATM replenishment policies under demand uncertainty
Author: Ekinci, Y., Serban, N., Duman, Ekrem

İsim	Optimal ATM replenishment policies under demand uncertainty
Yazar	Ekinci, Y., Serban, N., Duman, Ekrem
Basım Tarihi:	2021-06
Basım Yeri	- Springer Nature
Konu	Automated teller machines, Demand uncertainty, Replenishment policy
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	1109-2858
Kayıt Numarası	6aa7504a-6a8f-49a7-bacf-2628513aebca
Lokasyon	Industrial Engineering
Tarih	2021-06
Örnek Metin	The use of Automated Teller Machines (ATMs) has become increasingly popular throughout the world due to the widespread adoption of electronic financial transactions and better access to financial services in many countries. As the network of ATMs is becoming denser while the users are accessing them at a greater rate, the current financial institutions are faced with addressing inventory and replenishment optimal policies when managing a large number of ATMs. An excessive ATM replenishment will result in a large holding cost whereas an inadequate cash inventory will increase the frequency of the replenishments and the probability of stock-outs along with customer dissatisfaction. To facilitate informed decisions in ATM cash management, in this paper, we introduce an approach for optimal replenishment amounts to minimize the total costs of money holding and customer dissatisfaction by taking the replenishment costs into account including stock-outs. An important aspect of the replenishment strategy is that the future cash demands are not available at the time of planning. To account for uncertainties in unobserved future cash demands, we use prediction intervals instead of point predictions and solve the cash replenishment-planning problem using robust optimization with linear programming. We illustrate the application of the optimal ATM replenishment policy under future demand uncertainties using data consisting of daily cash withdrawals of 98 ATMs of a bank in Istanbul. We find that the optimization approach introduced in this paper results in significant reductions in costs as compared to common practice strategies.
DOI	10.1007/s12351-019-00466-4
Cilt	21

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Optimal ATM replenishment policies under demand uncertainty

Yazar Ekinci, Y., Serban, N., Duman, Ekrem

Basım Tarihi 2021-06

Basım Yeri - Springer Nature

Konu Automated teller machines, Demand uncertainty, Replenishment policy

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 1109-2858

Kayıt Numarası 6aa7504a-6a8f-49a7-bacf-2628513aebca

Lokasyon Industrial Engineering

Tarih 2021-06

Örnek Metin The use of Automated Teller Machines (ATMs) has become increasingly popular throughout the world due to the widespread adoption of electronic financial transactions and better access to financial services in many countries. As the network of ATMs is becoming denser while the users are accessing them at a greater rate, the current financial institutions are faced with addressing inventory and replenishment optimal policies when managing a large number of ATMs. An excessive ATM replenishment will result in a large holding cost whereas an inadequate cash inventory will increase the frequency of the replenishments and the probability of stock-outs along with customer dissatisfaction. To facilitate informed decisions in ATM cash management, in this paper, we introduce an approach for optimal replenishment amounts to minimize the total costs of money holding and customer dissatisfaction by taking the replenishment costs into account including stock-outs. An important aspect of the replenishment strategy is that the future cash demands are not available at the time of planning. To account for uncertainties in unobserved future cash demands, we use prediction intervals instead of point predictions and solve the cash replenishment-planning problem using robust optimization with linear programming. We illustrate the application of the optimal ATM replenishment policy under future demand uncertainties using data consisting of daily cash withdrawals of 98 ATMs of a bank in Istanbul. We find that the optimization approach introduced in this paper results in significant reductions in costs as compared to common practice strategies.

DOI 10.1007/s12351-019-00466-4

Cilt 21