The Design of Dynamic Model to Predict Money Demand in Tehran City in Automated Teller Machines (ATMs) (Case Study: Shahr Bank)

ATMs are one of the most important cash distribution channels for banks. In this paper, asset and liability management model is investigated according to the ATMs failure times and ATMs failure to provide services by s, S policy. This paper seeks to provide a continuous review dynamic model for predicting demand with demands of money withdraw in a discrete way, in order to minimize the total costs of dormant money and lost opportunity for Shahr bank ATMs. The number of ATMs surveyed is 272 in Tehran city, and the second 6-month period in 1394 is intended to assess the machines behavior. Arena software is used to simulate the ATMs behavior. Results showed that this model is capable to provide money re-order point and money demand point up to desired size for bank ATMs. Accordingly, the optimal time and amount of money placement in ATMs and the minimum cost of the whole money putting process including optimization costs of the dormant money and lost opportunity are presented. With implementation of this model, in total, money placement costs of Shahr Bank ATMs in Tehran city has decreased by about 10 times.