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- Title
Static vs. Dynamic Priority Rules for Check Processing in Multiple Dispatch-Multiple Branch Banking.
- Authors
Mabert, Vincent A.
- Abstract
This paper presents a study comparing the use of four static and two dynamic priority rules for sequencing bundled checks in the check clearing operations in a bank's back office. The six priority rules are tested in a controlled computer simulation experiment, where bank factors of check bundle size, check bundle value, transit deadlines (dispatches), and destination proportions are systematically varied over prescribed levels. The results indicate that priority rule performance, measured by reduced float, is significantly affected by bank factors. The test results indicate that the two dynamic priority rules performed statistically better than three of the four static rules tested. The study reported here should prove useful to bank operation managers. The sequencing rules investigated here influence the level of float for a bank faced with multiple dispatches during the day. The test environments duplicated a variety of operating conditions that can be present in commercial banks. Therefore, the robustness of the tested static and dynamic rules were observed in reducing float under different conditions. Dynamic rules require recomputing priorities to reflect changes in time and create greater implementation effort to use effectively. Static rules require only one priority computation, resulting in easier implementation. This study indicates that one of the static priority rules tested provides comparable performance to the two dynamic rules.
- Subjects
CLEARINGHOUSES (Banking); BANKING industry; CHECKS; BANK management; OPERATIONS research
- Publication
Journal of Operations Management, 1982, Vol 2, Issue 3, p187
- ISSN
0272-6963
- Publication type
Article
- DOI
10.1016/0272-6963(82)90006-7