Abstract
Cash-related costs constitute a large portion of management cost of an automated teller machine (ATM) network. Cash should be delivered to or picked-up from ATM devices in certain intervals in order to both meet customer satisfaction and to be able to generate additional revenue from excess cash through daily interest rates. Unlike classical ATMs, new-generation ATMs, also called recycle ATMs, have a single cassette for cash withdrawal and deposit; this property imposes new restrictions on ATM cash management. Moreover, recycle ATMs are costly, and hence their deployment should be planned carefully. In this paper, our aim is to optimize the ATM networks in terms of cash related costs. We formulate an optimization problem as an integer linear program, which jointly decides on when to visit an ATM, how much money to deliver to which ATM and which road should be followed for the distribution of cash to the ATMs. We also decide on which ATMs in the network should be replaced by a recycle ATM. We then propose a polynomial-time heuristic algorithm and compare it with the optimization formulation in terms of cash cost and the recycle ATM decision. We demonstrate through performance evaluation that our heuristic algorithm is suitable for practical implementation.
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