Simulation and Analysis of Bank Teller Manning
Proceedings of the 1995 Winter Simulation Conference ed. C. Alexopoulos, K. Kang, W. R. Lilegdon, and D. Goldsman
A SIMULATION AND ANALYSIS OF BANK TELLER MANNING
Donald Hammond Sathi Mahesh Department of Management The University of New Orleans New Orleans, Louisiana U.S.A.
ABSTRACT
This paper presents an application study to find cost effective bank teller management policies for providing high quality service levels at reasonable costs in a modern banking system. Two models are developed. The first is a spreadsheet model to calculate desired teller manning levels from mathematical queuing models, and the second is a simulation model for testing new management policies. Manning heuristics are tested and found to provide the desired level of services.
1 INTRODUCTION
In the highly competitive banking business, customers now demand many custom fit products from interest paying checking accounts and free traveler’s checks to “no annual fee“ VISA cards. The local branch bank has become a financial center for a wide variety of these services. Deregulation in the banking industry has led to numerous mergers and stiff competition for the existing customer base. Bank management at one major metropolitan bank found that in the new market after deregulation they were the fourth largest bank in a larger market, rather than the largest in their previous smaller market. Increasing the productivity of banking operations has become a major issue in bank management, and tellers and lobby services have been identified as two of five major areas for productivity improvement at regional banks. This fact has highlighted the need for establishing staffing levels based on standards of customer service (Pihl and Wambay 1990). Customers demand higher levels of service and now have numerous choices in how to get service. In spite of the availability of automated service, many customers still prefer to use human teller services, but long waits for service are perceived as a
A SIMULATION AND ANALYSIS OF BANK TELLER MANNING
Donald Hammond Sathi Mahesh Department of Management The University of New Orleans New Orleans, Louisiana U.S.A.
ABSTRACT
This paper presents an application study to find cost effective bank teller management policies for providing high quality service levels at reasonable costs in a modern banking system. Two models are developed. The first is a spreadsheet model to calculate desired teller manning levels from mathematical queuing models, and the second is a simulation model for testing new management policies. Manning heuristics are tested and found to provide the desired level of services.
1 INTRODUCTION
In the highly competitive banking business, customers now demand many custom fit products from interest paying checking accounts and free traveler’s checks to “no annual fee“ VISA cards. The local branch bank has become a financial center for a wide variety of these services. Deregulation in the banking industry has led to numerous mergers and stiff competition for the existing customer base. Bank management at one major metropolitan bank found that in the new market after deregulation they were the fourth largest bank in a larger market, rather than the largest in their previous smaller market. Increasing the productivity of banking operations has become a major issue in bank management, and tellers and lobby services have been identified as two of five major areas for productivity improvement at regional banks. This fact has highlighted the need for establishing staffing levels based on standards of customer service (Pihl and Wambay 1990). Customers demand higher levels of service and now have numerous choices in how to get service. In spite of the availability of automated service, many customers still prefer to use human teller services, but long waits for service are perceived as a
References: Cheng, T. C. E. 1990. An overview of uses of techniques in bank management, Managerial Finance 16: 1-6. Krut, R., and M. Bulgen. 1990. Changing manager’s behaviors through simulations, Personnel Management 2: 61-63. McDonnel, E. D., and A. W. Klipsch. 1988. Controlling teller costs: An integrated approach, Banker’s Magazine 171: 20-24 Pihl, W. H. and M. L. Wambay. 1990. Leading regionals focus on productivity, Bank Management 66: 52-55. Pritsker, A. A. B. 1986. Introduction to simulation and SLAM 11, 3d ed. New York: Halsted Press. SLAMSYSTEM Version 4.5 for Windows 1994, Pritsker Corp.,Indianapolis, IN. Thompson, V. 1994. Multimedia: The choice of a Swiss bank, Training 31: 14-17. Wayne, C. B., and K. DiSotto. 1994. Bank design from the banker’s point of view, Bank Marketing, 26: 39-42. AUTHOR BIOGRAPHIES DONALD HAMMOND is an Associate Professor in the Department of Management at the University of New Orleans. He received a B.S. degree in Mathematics from Oklahoma University in 1965, an M.S. degree in Logistics Management from the Air Force Institute of Technology in 1974, and a Ph.D. in Business Administration from The Florida State University in 1989. His research interests are focused in Information and Production systems analysis, particularly where computer modeling is required. SATHI MAHESH is a Professor in the Department of Management at the University of New Orleans. He received a B.S. degree in Engineering from the University of Madras in 1976 and a Ph.D. in Business Administration from Purdue University in 1984. His research interests are in Information Systems and Expert Systems.