Multi-objective ATM Location Problem in a Metropolitan City

Abstract

Location problems are considered as an important branch of the strategic decision-making process. It is incontrovertible that finding the optimal locations of Automatic Teller Machines (ATMs) plays a salient role in retaining and enhancing the market share of the banks. In this study, a multi-objective linear mathematical model is developed to minimize the ATMs’ establishment costs, the surcharge costs, the interchange costs, and the number of lost customers simultaneously. In order to demonstrate the applicability of the proposed model, a case study of Tehran metropolis is presented. The General Algebraic Modeling System (GAMS), which is an optimization compiler, is used to solve the problem. The result indicates the establishment location of the new ATM machines by considering the current outsiders’ ATMs. © 2017, Springer International Publishing AG.