A Framework for Analyzing the U.S. Coin Supply Chain

Yiwei Huang, Yunxia Zhu, Subodha Kumar, Bala Shetty and Chelliah Sriskandarajah

Production and Operations Management, 2020, vol. 29, issue 12, 2736-2759

Abstract: We study a coin supply chain problem in the context of improving efficiency. While most consumer products are distributed in one direction, coins are recirculated and reused through the economy. The Federal Reserve System (FRS), the central banking system of the United States, plays a crucial role in managing the U.S. coin supply chain (CSC). It spends a significant fraction of its annual budget on operating the U.S. CSC in order to provide banking services to depository institutions (DIs) and the public. The objective of this study is to provide a near‐optimal or an optimal operating policy that minimizes the total cost of producing, supplying, and managing coin inventory in the U.S. CSC. The study demonstrates a modeling approach that not only can be applied for effectively and efficiently managing the coin supply in the United States, but also for managing similar coin supply chains around the world. The extensive tools and insights developed in this study may prove to be beneficial to the Federal Reserve’s Cash Product Office (CPO) that manages the distribution of the nation’s coin inventory. Managing demand uncertainty and streamlining its processes to be more adaptable to changes in demand are critical for the CPO to reduce supply chain costs. The robust optimization framework and the resulting insights presented in this study could potentially help the CPO to manage shifts in coin demand and achieve its cost reduction goals.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/poms.13168

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:popmgt:v:29:y:2020:i:12:p:2736-2759

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1937-5956

Access Statistics for this article

Production and Operations Management is currently edited by Kalyan Singhal

More articles in Production and Operations Management from Production and Operations Management Society
Bibliographic data for series maintained by Wiley Content Delivery ().