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Comparison of integer linear programming and dynamic programming approaches for ATM cash replenishment optimization problem

Özer, FaziIle
In Automated Telling Machine (ATM) cash replenishment problem, banks aim to re-duce the number of out-of-cash ATMs and duration of out-of-cash status. On theother hand, they want to reduce the cost of cash replenishment, as well. The problemconventionally involves forecasting ATM cash withdrawals, and then cash replenish-ment optimization on the basis of the forecast. We assume that reliable forecasts arealready obtained for the amount of cash needed in ATMs. The focus of the thesisis cash replenishment optimization. After introducing Linear Programming basedsolutions, we propose a solution based on dynamic programming. Experiments con-ducted on real data reveal that the proposed approach can find the optimal solutionmore efficiently than linear programming.