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Department of Industrial and Systems Engineering Seminar

 

Title: Inventory Models for Medium-Size Depository Institutions Under the New Federal Policy

Date : Sept 17th, Monday 2012, 1:50 p.m.-2:40p.m., 1027 Emerging Technologies Building

Speaker :  Chelliah Sriskandarajah

Affiliation : Hugh Roy Cullen Professor Department of Information and Operations Management, Mays Business School Texas A&M University

Abstract

In this talk, I will discuss a novel operations problem that I have encountered during my interaction with a Dallas-based company. The problem occurs in the area of cash supply chain management. The Federal Reserve of the U.S. introduced its new currency recirculation policy in July 2007 with the aim of reducing the overuse of its currency processing services by depository institutions (banks). The aim of this policy is to minimize the societal cost of providing currency to the public. I will discuss the main elements of the policy and outline novel operational issues that have emerged due to its implementation. In this context, I will also discuss my recent work with a leading secure-logistics provider. The effective local reuse of physical cash by depository institutions (DIs) is the primary goal of the new cash recirculation policy of the Federal Reserve System (Fed) of the United States. These guidelines, implemented since July 2007, encourage the reuse of cash by (i) penalizing a DI for the practice of cross shipping, the near simultaneous deposit of used cash to and withdrawal of fit cash from-the Fed; and (ii) offering a custodial inventory program that enables a DI to transfer fit cash to the Fed's books, but physically hold it within the DI's secured facility. The effective management of the inventory of cash under these new guidelines is both a challenging and important issue for DIs. I will discuss two new multiperiod models-designed specifically to capture the operations of a medium-size DI-that emerge from the DI's objective to minimize the total cost incurred in managing the inventory of cash over a finite planning horizon.

Bio

Chelliah Sriskandarajah is a professor of Operations Management and holds the Hugh Roy Cullen Chair at the Mays Business School, Texas A&M University. He has a Ph.D degree from the National Polytechnic Institute of Grenoble (France) in the field of Production Management. Prof. Sriskandarajah's research interests lie in the general area of supply chain management, logistics, production planning and scheduling, and performance evaluation of production/service systems. He was inducted as a POMS Fellow in April 2012. He has published over 100 scholarly articles in leading international journals. Over the years, his research has been supported by a number of sponsors including National Science Foundation (USA), Natural Sciences and Engineering Research Council (Canada), Manufacturing Research Cooperation of Ontario (Canada) and NATO. He currently serves as Associate Editor of POMS, DSJ and is a member of INFORMS, POMS, IIE, IEEE and APICS. He has served as the Associate Executive Director of Production and Operations Management Society (POMS) form March 2004 to April 2012.