An optimisation-simulation framework for integrated inventory and cash replenishment problem of automated teller machines in India

Abstract

This work is motivated by the problem of managing inventory and the optimal replenishment schedule for a network of automated teller machines (ATMs) in India. The objective is to minimise the occurrences of shortages at the ATMs and in turn to achieve a higher service levels while minimising the cost of holding inventory and replenishment of ATMs. The problem is casted as a rich variant of inventory routing problem with several practical restrictions such as maximum inventory at the ATMs. A two-phase iterative decomposition heuristic is proposed to efficiently solve the practical size problem instance. The computational experiments based on synthetic data are conducted to assess the efficiency and effectiveness of the proposed solution approach and a case of Varanasi city in India is presented for the analysis. The results show the effectiveness of our proposed approach over the conventional replenishment policies. Copyright © 2024 Inderscience Enterprises Ltd.