Locating Bank Mellat ATM kiosks using the mathematical model of maximum coverage, with genetic algorithm solution

Dissertation for receiving a master's degree in Industrial Management (Financial Orientation)

Abstract

Location of an economic activity, whether a retail business, factory, service center or It is one of the most important questions facing an economic enterprise as far as this issue can determine the success or failure of the enterprise. So far, many models have been created to help make decisions in the field of location, one of the most famous models among facility location models is the coverage problem model. This model tries to maximize the coverage of the population that is at a maximum distance or a certain time from a device. In this research, the model presented by Mariano and Serra (1998) is developed as a maximum coverage problem with the limitation of queue indices. In this way, in the objective function of the problem, by entering income and costs, in addition to maximizing the amount of covered demand, the amount of the company's profit is also calculated and maximized. This model has been used to determine and select suitable locations for establishing 10 Bank Mellat ATM kiosks among 30 candidate locations. To solve the model, multi-objective genetic meta-heuristic algorithm NSGA-II (genetic algorithm with non-dominant sorting) and MOEA Framework software are used.

It is worth noting that this model can be used for all decisions related to the location of this bank.

Keyword

Location, maximum coverage problem, genetic algorithm

1-1- Introduction

The issue of location is at the strategic levels of decision-making and is of fundamental importance in its success. The right location plays an important role in the competitiveness of a company in the market and should be chosen in such a way as to achieve competitive and strategic advantages compared to other competitors. The theoretical background of facility location is well developed. Ever since Weber's classic problem was formulated, location theory has been an active part of research, especially in the last 30 years. Currently, facility location can be seen as a large body of knowledge, diverse models, methodologies and different solution techniques in various fields such as industrial engineering, operations research, operations management, urban economy and political science (Pertoi, 2006).

Banking as an economic activity seeks to use scientific methods to maximize service coverage and efficiency and minimize costs. Although the emergence of ATMs was initially in banks and they have been providing services in banks for years, but the capabilities of ATMs have caused them to be used in other places, even open points. For this reason, ATMs are installed in the form of kiosks in different areas of the city and subsequently determining the appropriate location for them is important to the extent of locating bank branches (Sultani, 1383).

The present study as an applied research using the maximum coverage location technique to present a model with queue parameter limitations to select the location of 10 Mellat Bank ATM kiosks from among 30 selected parks in areas 1 to 5 of Tehran Municipality, with the aim of maximizing the income from These devices have been paid. The model provided by the multi-objective genetic algorithm and the MOEA Framework software, and the resulting results, in addition to determining the selected options for the establishment of ATM kiosks, also indicate the optimal performance of this algorithm. 1-2- Statement of the research problem: Locating an economic activity, whether it is a retail company, a factory, or a service center. It is one of the most important questions facing an economic enterprise as far as this issue can determine the success or failure of the enterprise. A poor choice of location may result in additional transportation costs, loss of skilled labor, competitive advantage, or some similar condition that is critical to operations. Each company has a geographical area of ??influence that attracts the majority of its customers from within this area. This area is known as the service or commercial area, of course, it should be noted that this area is limited in terms of distance and the company has a limited scope of influence. Now, if the place chosen for the company is in such a way that there are many potential customers within the scope of the company's influence, the possibility of the company's success increases greatly, and an inappropriate choice due to the lack of a potential field of activity can lead to the failure of the company (Azizi, 2018).. Nowadays, ATMs are used as an alternative to bank branches in many cases, due to the advantages they have and the wide range of services they provide. Therefore, choosing the right location for them is as important as the location of the branches. So far, many models have been created to help make decisions in the field of location. In general, location studies began in the 1910s, but quantitative models entered the field of urban facility location in the late 1960s in the United States with the introduction of a systemic approach in urban planning. In 1963, the very important Lari model, which focused on three related urban characteristics, namely employment, population and transportation, was proposed. The computer simulation method was presented by Markland in 1973, and in 1986, a person named John Cressin made the Larry model dynamic, that is, he introduced the time factor in the model analysis. At the end of this decade, the efforts made for the integration of quantitative models were successful in the beginning of the 90s, and GIS entered the field. In 1999, Liang and Long proposed an algorithm for location using fuzzy theory concepts (Sadhund, 2013). One of the most famous models among facility location models is the coverage problem model. While the coverage models are not new models, they have always attracted a lot of attention from researchers. The reason for this is their ability to be used in the real world, especially for service and emergency facilities. According to the history and origin of the work done, Hakimi introduced the coverage problems for the first time in 1965.

Barkhi[1], Shilling[2] and Jayaraman[3] in 1993 classified the models that use the concept of coverage into two groups: 1) set coverage problems (SCP) in problems where coverage is required and 2) maximum coverage localization problem (MCLP) when the coverage is optimized (Zanjirani Farahani et al., 2012).

In this research, an attempt has been made to develop a model of the coverage problem (MCLP group) which, in addition to maximizing the profit of the company, increases the level of satisfaction of the applicants by setting a limit on the maximum optimal length of the queue. In this context, in the long run, it will lead to the destruction of the organization. Today, the value of a manager depends on the decisions he makes, and on the other hand, decisions are valuable based on accurate information. Conducting correct and appropriate location studies, in addition to the economic impact on the performance of a company, will have social, environmental, cultural and economic effects in the area where it is built (Mousavi, 2008). ((Suitable location)) A facility is one of the effective factors in the success of the unit, which should be considered before construction and operation. Therefore, determining the location is considered one of the most important steps of its establishment, because the results of this decision in the long run will have significant effects from the economic, social and social dimensions. will have (Azizi, 2018).

Also, in order to determine the best possible location for the facility, it is very important to choose a comprehensive technique for location, because the location process itself requires spending money, therefore, determining a model that is capable of long-term use for the establishment of new branches of the company and at the same time, in addition to high efficiency, imposes minimum cost on the company will also have high sensitivity and importance. Research

Determining the right place to install an ATM kiosk using mathematical covering technique

1-5- Research questions

Regarding the effective factors in determining the right place to install an ATM kiosk, what is the priority of the available options?

What is the appropriate mathematical model and its solution method for locating the location of the ATM kiosk?

1-6- Research assumptions

Given the nature of the problem, it cannot be For the problem, pre-formulated assumptions were made.

Introduction

Knowing the theoretical foundations and literature related to the issue of location and the suitability of each of the location methods for use in service or operational systems, as well as an overview of the researches that have been carried out in close connection with the issue of location of service systems, as well as the use of appropriate software to obtain accurate findings will make the research have a stronger framework and foundation.