Location-Inventory Routing Problem with Module Selection for a Cash Logistics Network Design Problem

Independent ATM Deployers (IADs) are emerging companies that own and operate Automated Teller Machines (ATMs) independently of banks or financial institutions. Cash logistics is the primary process of these companies, and its profitability directly depends on the type of modules chosen as a strategic decision. This paper investigates the optimization of the cash logistic network design for a set of self-service banking devices. Two types of modules are used: i) ATMs that only can withdraw cash and ii) Cash Recycler Systems (CRS) that can withdraw and receive cash at the same time. The price of CRS is higher than ATM, but cash logistics operational cost can be less if used in the right location. The Location-Inventory Routing Problem (LIRP) with time windows and module selection is used to formulate the problem. As the problem addressed is NP-hard even in the small size, a novel metaheuristic algorithm is proposed by adopting an Invasive Weed Optimization (AIWO). A case study in IAD company demonstrates the model’s applicability. According to the results obtained, installing CRS devices in places far from other devices with appropriate returned cash is recommended. Moreover, CRS devices might be a better solution in locations close to depots with a high return rate or locations far from the depot, even with a low return cash rate