Optimization of HDFC Bank ATM using Queueing Theory

A report submitted in partial fulfillment of the

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Chapter No. Title Page No.
CHA"T#$ / %&T$OD*CT%O& 4
/./ Ob5e!ti6es 7 ,hole !ontent of the pro5e!t
/.3 %ntrodu!tion to the industry 1
CHA"T#$ 3 -%T#$AT*$# $#8%#, 9
CHA"T#$ 4 M#THODO-O+) :
4./ "roblem 'tatements
4.3 'olutions 2
CHA"T#$ 1 $#'*-T' A&D D%'C*''%O& ;
1./ $esults and its signifi!an!e
1.3 Ad6antages < Appli!ations
CHA"T#$ 9 CO&C-*'%O&' ;
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2
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Queue is a common word that means a waiting line or the act of joining a line. Queuing
theory was initially proposed by A.. !rlang in 1"#$. %t optimi&es the number of ser'ice
facilities and adjusts the times of ser'ices. Queuing theory is the study of (ueue or waiting
lines. )ome of the analysis that can be deri'ed using (ueuing theory include the e*pected
waiting time in the (ueue+ the a'erage time in the system+ the e*pected (ueue length as well
as the probability of the system to be in certain states+ such as empty or full. Queuing is the
common acti'ity of customers or people to a'ail the desired ser'ice+ which could be
processed or distributed one at a time. AT, is an automatic teller machine which is used to
sa'e the cost and reachability of a ban- by satisfying customer needs. Customers can
withdraw and deposit money without any paperwor- and it facilitates them to reduce time and
cost to go to ban- in person. .an- AT,s would a'oid losing their customers due to a long
wait on the line
/./ OB=#CT%8# A&D ,HO-# CO&T#&T OF TH# "$O=#CT
%n this project + (ueuing theory is applied to a /01C .an- AT, in Pune. )ome of the
analysis that can be deri'ed using (ueuing theory include the e*pected waiting time in the
(ueue+ the a'erage time in the system+ the e*pected (ueue length as well as the probability of
the system to be in certain states+ such as empty or full ,odel % 2,3,314 is used for sol'ing+
this model deals with a (ueueing system ha'ing Poisson input+ e*ponential ser'ice and there
is no limit on the system capacity while the customers are ser'ed on a first come +first basis.
"roblem ob5e!ti6e<
The o'erall objecti'e of this project is to reduce the waiting time of customers by pro'iding
an optimum solution to the problem.
Weekdays Busy Schedule HDFC (time in sec)
$
Weekdays Free Schedule HDFC (time in sec)
Weekends Schedule HDFC (time in sec)
/.3 %&T$OD*CT%O& TO %&D*'T$)
0ata is obtained from the branch manager+ /01C .an-+ /injewadi .ranch+ Pune+
,aharashtra.
/01C .an- 5imited is an %ndian financial ser'ices company based in ,umbai+ ,aharashtra.
%t was incorporated in 1""6.

/01C .an- is the fifth largest ban- in %ndia by assets. %t is the
largest ban- in %ndia by mar-et capitali&ation as of 26 1ebruary 2#16.
6
3. -%T#$AT*$# $#8%#,
7asumathi.A+ 0hana'anthan P 22#1#4+ in their research paper on Application of )imulation
Techni(ue in Queuing ,odel for AT, 1acility+ the authors formulated a suitable simulation
techni(ue which will reduce idle time of ser'ers and waiting time of customers for any ban-
ha'ing AT, facility. This research paper would be helpful for any ban- at global le'el for
impro'ing their customer ser'ice towards competition.
A&mat Nafees+ Q8!8%N9 T/!:;< AN0 %T) APP5%CAT%:N=ANA5<)%) :1 T/!
)A5!) C/!C:8T :P!;AT%:N %N %CA )8P!;,A;!T+ 22##>4+
This paper contains the analysis of Queuing systems for the empirical data of supermar-et
chec-out ser'ice unit as an e*ample. :ne of the e*pected gains from studying (ueuing
systems is to re'iew the efficiency of the models in terms of utili&ation and waiting length+
hence increasing the number of (ueues so customers will not ha'e to wait longer when
ser'ers are too busy.
;yan .erry+ Queueing Theory+ this paper defines the building bloc-s and deri'es basic
(ueueing systems. %t begins with a re'iew of some probability theory and then defines
processes used to analy&e (ueuing systems+ in particular the birth?death process. A few simple
(ueues are analy&ed in terms of steady?state deri'ation before the paper discusses some
attempted field research on the topic
). . 0har1+ Tan&ina ;ahman 22#1$4+ in their research paper on Case study for .an- AT,
Queueing model+ calculated parameters li-e utili&ation factor+ (ueue length and waiting time.
.ased on this calculation a suitable conclusion is drawn and the result can help in better
functioning of the ban-.
.ha'in Patel+ Pra'in .hathawala 3 %nternational @ournal of !ngineering ;esearch and
Applications 2%@!;A4 %))N= 226A?"B22+ 7ol. 2+ %ssue C+ )eptember? :ctober 2#12+ pp.12>A?
12A6. Case )tudy for .an- AT, Queuing ,odel.
,athias0harmawirya+ !rwin Adi+ %nternational Conference on ,anagement and Artificial
%ntelligence %P!0; 'ol.B 22#114 D 22#114 %AC)%T Press+ .ali+ %ndonesia. The paper
discusses the benefits of applying (ueueing analysis to a busy restaurant.
Crispin !mmanuel 0. 0ia&+ @im @oel ,adrigal+ Proceedings of the !astern Asia )ociety for
Transportation )tudies+ 7ol. C+ pp. 16"B ? 1C#"+ 2##C+ A55:CAT%:N :1 !5!CT;:N%C
T:55 C:55!CT%:N 5AN!) AT T:55 P5AEA) C:N)%0!;%N9 ):C%A5
:PT%,%EAT%:N :1 )!;7%C! T%,!) AN0 0!5A<+ %n this paper (ueueing analysis was
done and an optimum method was implemented to reduce the waiting period.
9er oole F A'ishai ,andelbaum+ Queueing ,odels of Call Centers 22##14+ This is a sur'ey
of some academic research on telephone call centres. Queueing model is used for efficient
call centre management.
C
4. M#THODO-O+)
2,3,3%4 (ueueing model is used to sol'e the problem and find an optimal solution. ,3,31
(ueue represents the (ueue length in a system ha'ing a single ser'er+ where arri'als are
determined by a Poisson process and job ser'ice times ha'e an e*ponential distribution.
An ,3,31 (ueue is a stochastic process whose state space is the set G#+ 1+ 2+ $+...H where the
'alue corresponds to the number of customers in the system+ including any currently in
ser'ice.
Arri'als occur at rate I according to a Poisson process and mo'e the process from
state i to i J 1.
)er'ice times ha'e an e*ponential distribution with parameter K in the ,3,31 (ueue.
A single ser'er ser'es customers one at a time from the front of the (ueue+ according
to a first?come+ first?ser'ed discipline. Lhen the ser'ice is complete the customer
lea'es the (ueue and the number of customers in the system reduces by one.
The buffer is of infinite si&e+ so there is no limit on the number of customers it can
contain.
4./ "roblem 'tatement
%n most of the AT,s the major problem is waiting of customers in the (ueue for more
duration. ,ainly the objecti'e of AT, for ban- is to -eep away the customers from coming
to ban- and ma-e the process easy for them to a'oid the basic procedure they do in ban-. .ut
the problem which most AT, face is the long (ueue in front+ but then when the problem is
only for a short while as rest of the time the AT, remains idle means adding to the operating
cost. The problem is to determine whether only one machine is re(uired to fulfill the need or
two more machines needed to be installed to gi'e comfort to customer which is really of short
period of time.
B
>
4.4 'olutions
1rom the abo'e obtained data+
Mean Arrival time
1 customer in
47 sec
() weekdays busy
Mean Servicetime
1 customer in
95 sec
() weekdays busy
weekdays ree 1 customer in !1"
sec
#eekdays ree 1 customer in 1!"
sec
weekends 1 customer in 166
sec
#eekends 1 customer in 9$ sec
1) =/ (wee-days busy4
=0.6315/1.299
=0.486
=0.285/0.5=0.57 2wee-days free4
=0.4167/0.625=0.66672 2wee-ends4
2) P
#
M1? ( wee-days busy4
=10.486
=0.514
P
#
M1?#.C> 2 wee-days free4
M#.6$
P
#
M1?#.BBB>2 2wee-ends4
M#.$$$2A


$4 5M 1.26BB32#.B$1C?1.26BB4 M 2.#2B (wee-days busy4

5M #.2AC32#.C?#.2AC4 M 1.$2CB 2wee-days free4

5M #.61B>32#.B2C?#.61B>4 M 1.""2A 2wee-ends4

64 5(M #.6AB*2.#2B M #."A6 (wee-days busy4
A
5(M#.C>*1.$2CB M #.>CCC 2wee-days free4
5(M#.BBB>2*1.""2A M 1.$2A 2wee-ends4
C4 L(M#."A631.26BB M #.>A" mins (wee-days busy4
L(M#.>CCC3#.2AC M 2.BC#A mins 2wee-days free4
L(M 1.$2A3#.61B> M $.1B" mins 2wee-ends4
B4 LM 2.#2B31.26BB M 1.B2C mins (wee-days busy4
LM 1.$2CB3#.2AC M 6.BC122 mins 2wee-days free4
LM 1.""2A3#.61B> M 6.>A2$ mins 2wee-ends4
1. $#'*-T' A&D D%'C*''%O&'
7arious parameters li-e a'erage (ueue length+ waiting time+ utili&ation factor is calculated. I
is calculated by considering arri'al time of the customers to that of the number of customers.
)er'ice time is the time re(uired for completion of a ser'ice i.e.+ it is the time inter'al
between beginning of a ser'ice from AT, machine and its completion. .ased on the
calculation during prime hours AT, is fully occupied+ thus implied by utili&ation factor
appro*imately e(ual to 1. 0uring non?busy hours it is 6$N and wee-ends it is $$N. :ne of
the major problem is O:ut of ser'iceP. Assumption made for calculation is that the customers
donQt lea'e the (ueue before the ser'ice.
1./ Ad6antages
This case study can help ban- AT, to increase its Qo) 2Quality of )er'ice4+ by anticipating+
if there are many customers in the (ueue. The result of this case study may become the
reference to analy&e the current system and impro'e the ne*t system. .ecause the ban- can
now estimate the number of customers waits in the (ueue and the number of customers going
away each day. .y estimating the number of customers coming and going in a day+ the ban-
can set a target that+ how many AT,s are re(uired to ser'e people in the main branch or any
other branch of the ban-.
9.CO&C-*'%O&
The main purpose of this study is to de6elop an effi!ient pro!edure for
ATM ueuing problem> ?hi!h !an be daily used by banks to redu!e the
?aiting time of !ustomers in the system. 8arious parameters of ueueing
are !al!ulated. %t is !on!luded from the results that in order to redu!e the
?aiting time a ne? ATM should be installed. This ?ill be helpful for the
bank to sustain more potential !ustomers in !ompetiti6e situations ?ith
other banks.
"
$#F#$#&C#' @/1 Bold CapsA
@ To be arranged in year?iseA
/. 7asumathi.A
1
+ 0hana'anthan P
2

1 Assistant Professor+ 7%T .usiness )chool+ 7%T 8ni'ersity+ Chennai.
2 Professor and /ead+ 0epartment of )tatistics+ Pondicherry
8ni'ersity+ Pondicherry
Application of )imulation Techni(ue in Queuing ,odel for AT, 1acility+
%NT!;NAT%:NA5 @:8;NA5 :1 APP5%!0 !N9%N!!;%N9 ;!)!A;C/+
0%N0%985+ 7olume 1+ No $+ 2#1#
3. ). . 0har1+ Tan&ina ;ahman2
Case )tudy for .an- AT, Queuing ,odel+ %:); @ournal of ,athematics
2%:);?@,4 e?%))N= 22>A?C>2A+p?%))N= 2$1"?>BCR+ 7olume >+ %ssue 1 2,ay. S
@un. 2#1$4+ PP #1?#C
4. 9er oole1 F A'ishai ,andelbaum2
17rije 8ni'ersiteit+ 0e .oelelaan 1#A1a+ 1#A1 /7 Amsterdam+ The Netherlands
2%ndustrial !ngineering and ,anagement+ Technion+ /aifa $2###+ %srael+ Queueing
,odels of Call Centres+ An %ntroduction.
6. Crispin !mmanuel 0. 0ia&+ @im @oel ,adrigal+ Proceedings of the !astern Asia
)ociety for Transportation )tudies+ 7ol. C+ pp. 16"B ? 1C#"+ 2##C+ A55:CAT%:N
:1 !5!CT;:N%C T:55 C:55!CT%:N 5AN!) AT T:55 P5AEA)
C:N)%0!;%N9 ):C%A5 :PT%,%EAT%:N :1 )!;7%C! T%,!) AN0 0!5A<
C. ,athias0harmawirya+ !rwin Adi+ %nternational Conference on ,anagement
and Artificial %ntelligence %P!0; 'ol.B 22#114 D 22#114 %AC)%T Press+ .ali+
%ndonesia.
B. A&mat Nafees+ Q8!8%N9 T/!:;< AN0 %T) APP5%CAT%:N=ANA5<)%) :1
T/! )A5!) C/!C:8T :P!;AT%:N %N %CA )8P!;,A;!T
>. 9er oole F A'ishai ,andelbaum+ Queueing ,odels of Call Centers 22##14
11