Optimization of Bank Check Sorting and Clearing Operation

In this paper we examine the check sorting and clearing operation and develop a mathematical model for arriving at optimal decisions on check sorting patterns and clearing routes. Previous research in this area has focused on either the sorting operation or the clearing operation, and hence the main contribution of our research is to develop and solve optimization model that simultaneously represents both these operations. The proposed model was tested using real-life operational data obtained from a Philadelphia-based bank. After optimally solving the model, we recommend possible ways of finding more robust sorting and clearing decisions, and compare the robust decisions to the optimal solution. It should be noted that the sorting and clearing operation is not limited to banking industry alone, but that it is also a backbone of the U.S. Postal Service operation. The output of the proposed research can therefore have wider applicability and implications.