Banks and other financial institutions operate a supply chain with only one product moving across the network. Financial transactions involving cash behave randomly, and therefore the cash flows are random variables. Although the cash is kept in several nodes to attend to the demand of final customers, keeping it available carries an opportunity cost related to its investment options. The process of planning the inventory level of cash that should be maintained across the network is closely related to transportation decisions. Cash transportation has a high cost, associated with the high risk of theft. Increasing the inventory available at every branch can reduce the need for transportation, but the opportunity cost can be very high. Furthermore, the cash inventory is also related to the service level perceived by final customers; therefore, a low money inventory can cause high costs due to stockouts. The aim of this work is to find optimal decisions related to cash inventory and transportation across the network, trying to balance the cost of the service and user's perception of quality, taking into consideration the stochastic behavior of the cash demand series. IntroductionIn a recent work (Osorio and Toro 2010) we faced the optimization of a cash supply chain by using an MIP model solved by combining a commercial linear programming solver to deal with the resulting model and an iterative procedure to set the
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