A Review of Operational Issues in Managing Physical Currency Supply Chains

Geismar, H. Neil; Sriskandarajah, Chelliah; Zhu, Yifu

doi:10.1111/poms.12593

Cited by 15 publications

(12 citation statements)

References 32 publications

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“…Besides the coin denominational system, research is scarce for addressing the operational problems in the CSC (Geismar et al. 2017), which presents a number of opportunities to be explored. The supply side problem in this study focuses on the FRS’s national perspective in analyzing the production, distribution, recirculation, and inventory management of coins in the CSC.…”

Section: Literature Reviewmentioning

confidence: 99%

A Framework for Analyzing the U.S. Coin Supply Chain

Huang

Zhu

Kumar

et al. 2020

Production and Operations Management

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W e study a coin supply chain problem in the context of improving efficiency. While most consumer products are distributed in one direction, coins are recirculated and reused through the economy. The Federal Reserve System (FRS), the central banking system of the United States, plays a crucial role in managing the U.S. coin supply chain (CSC). It spends a significant fraction of its annual budget on operating the U.S. CSC in order to provide banking services to depository institutions (DIs) and the public. The objective of this study is to provide a near-optimal or an optimal operating policy that minimizes the total cost of producing, supplying, and managing coin inventory in the U.S. CSC. The study demonstrates a modeling approach that not only can be applied for effectively and efficiently managing the coin supply in the United States, but also for managing similar coin supply chains around the world. The extensive tools and insights developed in this study may prove to be beneficial to the Federal Reserve's Cash Product Office (CPO) that manages the distribution of the nation's coin inventory. Managing demand uncertainty and streamlining its processes to be more adaptable to changes in demand are critical for the CPO to reduce supply chain costs. The robust optimization framework and the resulting insights presented in this study could potentially help the CPO to manage shifts in coin demand and achieve its cost reduction goals.

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Section: Literature Reviewmentioning

confidence: 99%

A Framework for Analyzing the U.S. Coin Supply Chain

Huang

Zhu

Kumar

et al. 2020

Production and Operations Management

Self Cite

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“…Among all different kinds of commodities, cash money plays a huge role in everyday life and widespread automated teller machines (ATM) has made withdrawing money easy at any time. Despite the dematerialization of financial transactions and high penetration factor of epayment mechanism, banknote and coins are still the most widely used payment method and it is expected to keep its dominance in the near future [6]. Cash-in-transit (CIT) companies and commercial banks carry out transportation of such commodity between cash deposits or banks' vaults and customers (e.g., ATMS, hypermarkets).…”

Section: Setsmentioning

confidence: 99%

“…Inequality (4) expresses, in each period each customer receives commodity at most by one vehicle and constraint (5) ensures that each armored vehicle can move toward customers only from one facility center. Inequalities (6) and (7) model that in case a candidate facility center is selected, at least one vehicle is transferred from that facility center to a customer. The following constraints (8)-(10) prohibit illegal routes and oblige vehicles return to the origin facility center.…”

Section: Mathematical Formulationmentioning

confidence: 99%

A Comprehensive Mathematical Model for a Location-routing-inventory Problem under Uncertain Demand: a Numerical Illustration in Cash-in-transit Sector

Fallahtafti

Vahdatzad

Sadeghieh

2019

IJE

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The purpose of this article is to model and solve an integrated location, routing and inventory problem (LRIP) in cash-in-transit (CIT) sector. In real operation of cash transportation, to decrease total cost and to reduce risk of robbery of such high-value commodity. There must be substantial variation, making problem difficult to formulate. In this paper, to better fit real life applications and to make the problem more practical, a bi-objective multiple periods, capacitated facilities with time windows under uncertain demand (BO-PCLRIP-TW-FD) in the LRIP, motivated by the replenishment of automated teller machines, is proposed. Then, using the chance constrained fuzzy programming to deal with uncertain parameters, the comprehensive model is formulated as a crisp mixed-integer linear programming. At last, to validate the mathematical formulation and to solve the problem, the latest version of ε-constraint method (i.e., AUGMECON2) is used. The proposed solution approach is tested on a realistic instance in CIT sector. Numerical results demonstrate the suitability of the model and the formulation. The ability of the model to be useful references for security carriers in real-world cases.

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“…In fact, more than 2.5 billion adult people do not have access to banks or to any other financial services. Specifically, in Brazil 57% of the adult population are unbanked, and in South Africa 54% of the adult population are unbanked (Geismar et al., ). In developed countries, in addition to small value transactions, people prefer to use cash to preserve their anonymity.…”

Section: Introduction and Literature Reviewmentioning

confidence: 99%

A cash transportation vehicle routing problem with combinations of different cash denominations

Szeto

et al. 2019

Int Trans Operational Res

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This paper investigates a new cash transportation problem, which is a variant of the capacitated vehicle routing problem. To better satisfy the demands of customers (e.g., banks, large retailers, shopping centers, automated teller machines, etc.), the combination of different cash denominations (i.e., $100, $50, $20, etc.) is considered. The robbery risk, which is measured by both the amount of cash being carried and the distance covered by the vehicle carrying the cash, is limited by a risk threshold. The problem is formulated as mixed‐integer linear programming to minimize the total cost, which consists of the total travel cost and the total penalties due to the unmet expected demand of customers. A combined hybrid tabu search metaheuristic is proposed to solve this problem. Tabu search is adopted for determining routing decisions while three methods, namely the exact method, the greedy method, and the mixed method, are proposed to be embedded within the tabu search to determine the denomination combination strategy. The numerical studies show that the proposed method makes a good tradeoff between the solution quality and the computation time. Experimental results also reveal the effects of the unit penalty and the risk threshold.

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A Review of Operational Issues in Managing Physical Currency Supply Chains

Cited by 15 publications

References 32 publications

A Framework for Analyzing the U.S. Coin Supply Chain

A Framework for Analyzing the U.S. Coin Supply Chain

A Comprehensive Mathematical Model for a Location-routing-inventory Problem under Uncertain Demand: a Numerical Illustration in Cash-in-transit Sector

A cash transportation vehicle routing problem with combinations of different cash denominations

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