Optimization-Based Cash Management Model for Microfinance Applications Using GSA and PSO

Banks and businesses use cash as a means for exchange in finance on a regular basis to please customers. Making decisions about cash management can be challenging because banks must keep significant sums of cash in order to sustain high levels of client satisfaction. In this paper, linear PSO and GSA models are given for estimating the daily cash demand of a bank by taking into account the variables Year of Reference ( \(R_{Y}\) ), Year’s Month ( \(M_{y}\) ), Month’s Day ( \(D_{m}\) ), Day’s Week ( \(D_{w}\) ), Payday Effect Salary ( \(S_{e}\) ), and Holiday Effect ( \(H_{e}\) ). Using PSO and GSA in MATLAB, the algorithms for estimating both the model coefficients for short term are implemented from the real data of a specific bank branch. The proposed system's overall cost is minimized using a fitness function. It was discovered that the results are in good accord with the observed data and that the PSO-based cash management model outperformed other models with superior accuracy. The models are then used for future cash management for validation.