Tactics for approaching cash optimisation in bank branches

Tactics for approaching cash optimisation in bank branches

0.00 Avg rating0 Votes
Article ID: iaor20171109
Volume: 11
Issue: 6
Start Page Number: 492
End Page Number: 503
Publication Date: Mar 2016
Journal: International Journal of Simulation and Process Modelling
Authors: ,
Keywords: finance & banking, simulation, combinatorial optimization, programming: dynamic, allocation: resources
Abstract:

Banks, through their branches, offer cash transactions as a key service, so any lack of available cash is a critical issue, since it affects the prestige of the entire bank not just of that branch in particular. This paper aims to establish a vault policy, that lets the staff know how to manage the branch's money efficiently, by handling orders to the central vaults with realistic assumptions and easy‐to‐implement criteria. We present a model based on dynamic programming principles, to represent the problem and generate an input for the vault policy. Other inputs for the policy are some parameters set according to a branch's demand for a cash transactions approach, from the perspective that the best fit is between frequentist and Bayesian. With these inputs and a definition of some 'intuitive' rules we can implement and assess the vault policy. The results for 30 branches are presented.

Reviews

Required fields are marked *. Your email address will not be published.