Case Study

Assignment
RedSeer Consulting

Submitted by: Sheenal Chhabra

Problem Statement:
Estimate the number of money cash vans required to keep all ICICI ATMs
stocked with money in a Tier 1 city.

Breaking down the problem:

1) How many ICICI bank ATMs are there in a Tier 1 city?
2) How much amount of cash can an ATM kiosk hold?
3) How often do ATMs need to be replenished?
4) How many ATMs are stocked in one trip of a cash van?
5) How many trips can one cash van do in one day?
1) Number of of ICICI bank ATMs in a Tier 1 City
Tier 1 Cities in India No. of ICICI ATMs
(Source : justdial.com)
Mumbai 90
New Delhi 131
Kolkata 43
Chennai 93
Hyderabad 62
Bangalore 147

Average no. of ICICI bank ATMs in a Tier 1 City

= Total no of ATMs in 6 Tier 1 Indian cities / Number of Tier 1 cities
= 566 / 6
= 94.3 ~ 95

No. of ICICI bank ATMs in a Tier 1 Indian City = 95

Number of ICICI Cash hold per Frequency of cash Per trip no of Number of trips
ATMs ATM replenishment ATMs served per Cash Van
An ATM has 4 cassettes with each cassette having a capacity to hold 2250 notes of one denomination.
Normally,
1 cassette holds notes of Rs 2000
1 cassette holds notes of Rs 500
2 cassettes hold notes of Rs 100

Total money an ATM holds in normal scenarios = 2250 (2000 + 500 + 2x100)
= Rs 60,75,000 (Rs 60 lakhs)

(Source : huffingtonpost.in)

Amount of money an ATM holds ~ Rs 60 lakhs

Number of ICICI Frequency of cash Per trip no of ATMs Number of trips per
Cash hold per ATM
ATMs replenishment served Cash Van per day
As on Dec 31, 2016, ICICI had
4909 on-site ATMs
9237 off-site ATMs
% of offsite ICICI ATMs of the total number of ICICI ATMs = 9237 / (9237+4909)
= 0.65
(Source : rbi.org.in)
Since onsite ATMs wont need a cash van, we consider only offsite ATMs in our calculation!

No. of off-site ATMs in a tier 1 city = % of off-site ATMs as a part of total ATMs x No. of ATMs in Tier1 City
= 0.65 x 95
~ 62 ATMs

According to a report published by Indian Express:

An ATM gets replenished every 3 days under normal circumstances in a city, and every 6 days in remote locations.

Therefore, number of ATMs getting replenished in one day = No. of offsite ATMs / 3 days replenishment period
= 21
Taking the worst case scenario, lets assume that 67% of the ATMs might be required refill in one day instead of 33%
= 42

Number of ATMs needed to be stocked with money in a day ~ 42

Number of ICICI Frequency of cash Per trip no of ATMs Number of trips per
Cash hold per ATM
ATMs replenishment served Cash Van per day
According to FICCI,
Maximum cash carrying guideline for a security van in a trip = Rs. 5 crores

(Source: http://ficci.in/SEdocument/20264/Proposed-Guidelines-Cash-Logistics-India.pdf)

Assuming the Objective : To find an optimized solution

For an optimized solution, we assume that all cash vans carry as much as they can i.e. 5 crores.

Number of ATMs a van can serve in a trip

= Amount a van carries / Amount an ATM can hold
= Rs 5 crores / 60 lakhs
= 8.33 ~ 8 ATMs

Maximum number of ATMs stocked in 1 cash van trip = 8

Number of ICICI Frequency of cash Per trip no of ATMs Number of trips per
Cash hold per ATM
ATMs replenishment served Cash Van per day
Calculating the time for which one van is under service:
One ATM replenishment takes approx. 25 to 30 mins
(Source : livemint.com)

From the previous slide: Maximum number of ATMs stocked in 1 cash van trip = 8

So,
Time taken by one cash van and crew in cash replenishment only = 30 mins x 8 ATMs
= 4 hours
Assuming the transit time, plus loading time from the parent branch = another 5 hours

Total time in one trip by one van = 9 hours

No. of trips one van can make in a day = 24 hours / 9 hours
~ 2 trips

Number of trips per cash van per day = 2

Number of ICICI Frequency of cash Per trip no of ATMs Number of trips per
Cash hold per ATM
ATMs replenishment served Cash Van per day
Calculations:

No. of trips per van per day = 2

No. of ATMs stocked per trip per van = 8
Therefore, No. of ATMs stocked per day per van = No. of trips per van per day x No. of ATMs stocked per trip
= 2x8
= 16

Number of vans required

= Number of ATMs needed to be stocked per day / Number of ATMs stocked per day per van
= 42 / 16
= 2.65 ~ 3 cash vans

Because we considered the best possible situation in every case, therefore a pillow to take care of adverse situations,
We assume a safety factor = 0.3
Total number of vans = (1 + 0.3) x 3
= 3.9 ~ 4

Number of cash vans required to keep all ICICI ATMs stocked in a Tier 1 city = 4
Alternative check for the solution:

Number of ATMs in India = 2.2 lakhs

Number of vans in India = 9000 vans
(Source : indianexpress.com)

Therefore, Number of ATMs one van serves = 2,20,000 / 9000

= 24.44 ~ 24

Total number of ATMs in a tier 1 city = 95 (from previous slide)

Therefore, total vans required in a tier 1 city = Total ATMs in the city / ATMs one van serves
= 95 / 24
= 3.95 ~ 4
Thank You!!