Optimal ATM replenishment policies under demand uncertainty

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dc.authoridDUMAN, EKREM/0000-0001-5176-6186
dc.authorwosidDUMAN, EKREM/GXN-3001-2022
dc.contributor.authorEkinci, Yeliz
dc.contributor.authorSerban, Nicoleta
dc.contributor.authorDuman, Ekrem
dc.date.accessioned2024-07-18T20:42:23Z
dc.date.available2024-07-18T20:42:23Z
dc.date.issued2021
dc.departmentİstanbul Bilgi Üniversitesien_US
dc.description.abstractThe 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.en_US
dc.identifier.doi10.1007/s12351-019-00466-4
dc.identifier.endpage1029en_US
dc.identifier.issn1109-2858
dc.identifier.issn1866-1505
dc.identifier.issue2en_US
dc.identifier.scopus2-s2.0-85063045705en_US
dc.identifier.scopusqualityQ2en_US
dc.identifier.startpage999en_US
dc.identifier.urihttps://doi.org/10.1007/s12351-019-00466-4
dc.identifier.urihttps://hdl.handle.net/11411/7264
dc.identifier.volume21en_US
dc.identifier.wosWOS:000653076600009en_US
dc.identifier.wosqualityQ2en_US
dc.indekslendigikaynakWeb of Scienceen_US
dc.indekslendigikaynakScopusen_US
dc.language.isoenen_US
dc.publisherSpringer Heidelbergen_US
dc.relation.ispartofOperational Researchen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.subjectAutomated Teller Machinesen_US
dc.subjectReplenishment Policyen_US
dc.subjectDemand Uncertaintyen_US
dc.subjectRobust Optimizationen_US
dc.subjectCash Managementen_US
dc.subjectNetwork Designen_US
dc.subjectPredictionen_US
dc.titleOptimal ATM replenishment policies under demand uncertaintyen_US
dc.typeArticleen_US

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