Multi-objective optimisation with stochastic discrete-event simulation in retail banking : a case study

Scholtz, E. ; Bekker, J. ; Du Toit, D. (2012)

CITATION: Scholtz, E., Bekker, J. & Du Toit, D. 2012. Multi-objective optimisation with stochastic discrete-event simulation in retail banking: a case study. Orion, 28(2):117–135, doi:10.5784/28-2-116.

The original publication is available at http://orion.journals.ac.za

Article

The cash management of an autoteller machine (ATM) is a multi-objective optimisation problem which aims to maximise the service level provided to customers at minimum cost. This paper focus on improved cash management in a section of the South African retail banking industry, for which a decision support system (DSS) was developed. This DSS integrates four Operations Research (OR) methods: the vehicle routing problem (VRP), the continuous review policy for inventory management, the knapsack problem and stochastic, discrete-event simulation. The DSS was applied to an ATM network in the Eastern Cape, South Africa, to investigate 90 different scenarios. Results show that the application of a formal vehicle routing method consistently yields higher service levels at lower cost when compared to two other routing approaches, in conjunction with selected ATM reorder levels and a knapsack-based notes dispensing algorithm. It is concluded that the use of vehicle routing methods is especially beneficial when the bank has substantial control over transportation cost.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/81090
This item appears in the following collections: