Developing a simulation model of the bank Islam performances
1.0 Background of the study
Nowadays, the system of the banks in Malaysia is not as efficient and quick as the
customers expect it to be. Most of the banks provide slow services which do not satisfy most
of the customers who came to the banks. Satisfaction of the customers is important towards the
efficiency of the bank services which will improve the competitiveness and profit of the bank
positively. As we can see, most of the customers need to wait for a long time and end up
encounter with delays before they receive their services.
The delays in receiving the services will lead to a long queue in the bank. Waiting time
and queueing are the two significant problems that will affect the service quality of the banks.
Besides the waiting time and queueing, the performance of the bank also be focused on. The
performance of the bank includes the total production and the utilization of the counters and
staffs provided by the bank towards the customers. Hence, the recognition and understanding
of customer demand and what the customer prefers is the initial step for the improvement of
the service capability.
Enhancing the performance of service industries where arrival and service time are
irregular and performed by human worker is a complex choice condition. One of the good
example that shows this above scenario is the banking industry. By using intelligent system,
decision makers assisted themselves to make a better decision and to improve the system
performance. Among the numerous simulation system is one of the intelligent system that
model a complex environment. A queue system has for quite some time been studied in the
business application (Berhan, E., 2015).
Hence, in this study the simulation and computer modelling approach is used to
overcome and enhance the waiting time and queues of the customers such as by reducing the
waiting time using simulation method. Simulation modelling and analysis is the process of
creating and experimenting with computerized mathematical models of a physical system. By
simulation modelling valuable information are achieved for making decision in all industries
including service industries such as bank. (Madadi, N., Roudsari, A. H., Wong, K. Y., &
Galankashi, M. R. 2013). Besides, the queueing theory is a mathematically based technique
for analysing waiting lines (queues).
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In queuing theory, queuing models are used to approximate a real queuing situation or
system so that the queuing behaviour can be analysed mathematically. It has been used
successfully in the studies of queue behaviour problems, optimization problems and the
statistical inference of queuing system (Xiao and Zhang, 2009). A bank can be defined as an
establishment authorized by a government to accept deposits, pay interest, clear checks, make
loans, act as an intermediary in financial transactions and provide other financial services to its
customers ([Link]
A discrete-event simulation (DES) method was used. Discrete event simulation refers
to one in which the state of a model changes at only a discrete, but possibly random, set of
simulated time points (Schriber and Brunner, 1997). This discrete model change could be
understood as the duration of it and may be ignored, face to the duration of the system. In this
study, a discrete-event simulation approach is utilized to study and analyze the bank Islam
performance. We focus on modelling and analysis of bank queuing systems. The study
comprises of simulating the behavioural performance of bank queuing systems by evaluating
and improve the performance and service quality of the bank Islam. A research is conducted,
showing the utility of proposed simulation approach.
1.1 Problem statement
The major problem encountered in this study is the long queue forming and
waiting time by the customers who came to the bank Islam in Varsity Mall, UUM. As
we can see, the situation of the long queue formed until outside of the banks often
occurred during the peak hours and non-peak hours. The longer waiting time and queue
formed by the customers is due to the not fully utilized of the resources in the Bank
Islam. We can see the customers waiting for a long time and meet the delays to receive
their service in the counters bank. Hence, the problem here is to determine whether the
resources fully utilized or not in order to make the services to be more efficient thus,
give comfort to the customers.
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1.2 Research Questions
1. How to develop a simulation model of the best possible configuration for bank Islam
in UUM?
2. How to investigate the performance of the bank Islam?
3. How to propose the efficiency and effectiveness of the bank performance by
decreasing the service providing time?
1.3 Research Objectives
1. To develop a simulation model of the best possible configuration for bank Islam in
UUM.
2. To investigate the performance of the bank Islam.
3. To propose the efficiency and effectiveness of the bank performance by decreasing
the service providing time.
1.4 Scope of the study
The bank chosen for this study is Bank Islam Malaysia Berhad which is located in
Varsity Mall, UUM. The bank operates 5 days per week. The bank opens at 9:30a.m.
and closes its entrance door at 4:30 p.m., but still operates until all the customers in the
bank are served. There are 8 counters available in the bank Islam. The basis of the study
is the application of the simulation and computer modelling technique in improving the
performance of the bank Islam which refer to the resources utilization. The resources
are mainly made up of counters and staffs. Observation and interviews approach are
used in this study to observe all the activities happened at the Bank Islam in a certain
day.
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1.5 Significance of the study
As we know, using the computer simulation technique, we can know the exactly
process of the bank and hence can solve the main problems that the bank faced. The
importance of this study is to provide a problem solving technique for the real world
using the simulation and computer modelling approach and thus making a decision.
Besides, the customers can save much time from involved in the queue. The increasing
of the performance in the Bank Islam will eventually lead to the customers’satisfaction.
Also, the utilization rate of staffs and counters will be fully utilized.
1.6 Expected Outcomes
Through this study, an attempt was made to improve the service quality of Bank
Islam in UUM by constructing a computer-based simulation model. The simulation
model proved its capability in investigating different configuration alternatives without
imposing the cost of physical changes. The computer-based simulation model was
constructed using ARENA software based on the data and conceptual model related to
the current configuration of the bank selected under this study. This research can help
the bank Islam to increase its quality of service. Also, this research may fulfill the
satisfaction of the customers towards the bank Islam system. Besides, the result of this
research will help to analyze the current system and be able to improve the next system.
In addition, the bank can set a target by increasing the number of customers coming
and going in a day to the bank.
2.0 Literature Review
2.1 Develop a simulation model of the best possible configuration for bank.
In today’s world, the success of the organizations mostly depends on the satisfaction of
the customers toward the improvement of the bank performance which refer to the bank’s
service quality towards the customers. As the service quality plays an important role in this
competitive world, the bank managers are trying to focus by providing the optimal service
configuration which this can lead to the satisfaction of the customers and service providers.
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Hence, in order to investigate and suggest the best possible configuration for a bank in Malaysia
the computer-based simulation models was constructed.
The constructed conceptual model is converted into a computer-based simulation model
during the simulation modeling phase using the WITNESS software to convert the conceptual
model into a simulation model. Through this approach, the investigation of different service
configurations without any physical alteration can takes place which will lead to the selection
of the best solution without having to spend expensively towards the cost (Madadi, N.,
Roudsari, A. H., Wong, K. Y., & Galankashi, M. R. 2013). According to M. Mutingi., et al.,
(2015) an excel based modelling and analysis approach to improve bank queueing systems was
made to stay competitive.
The measurement and management of the performance of the bank services need to be
done by the decision makers regarding the improvement of the service quality. A computer
simulation of a bank queuing system was built and validate using POM-QM software. The
system was sub-optimized through conducting the quantitative analysis and simulation. The
design finally impacted in a fewer number of service representatives, higher utilization and a
waiting time within the customer’s expected time limit (Ullah, A., Iqbal, K., Zhang, X. D., &
Ayat, M., 2014). Based on (Berhan, E., 2015), the total cost based on waiting on the systems
are found to be optimum with five servers with 58.4% server utilization through the running of
the simulation.
The total customers waiting in the systems or in the bank relatively low with five
number of servers as compared with the total number of customers waiting in the systems when
the number of servers are four as well as six or seven. The study suggested the bank to use five
servers so that it can operate with optimum cost but it still need to improve the utilization of
the servers utilization. In this study, the queuing system in bank has been simulated using
Witness 2004 Manufacturing Edition to decrease the average waiting time. DOE method has
been used to investigate the effects of significant factors on waiting time as a response. The
results showed that the factors of inter arrival time and number of counters should be at high
level and the factor service time should be at low level (Jafar Afshara., et al., 2013).
The use of ARENA simulation software to model the system and measuring the
performances impacted on the way customers are affected by changing the rules of banking
system and additionally improve banking quality and customers satisfaction through enhancing
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multi-skilled workers (Hatami, M., Mojib Zahraee, S., Ahmadi, M., Rahimpour Golroudbary,
S., & Mohd Rohani, J. 2014).
2.2 Performance of the bank.
Based on the research of “Analysis of Queuing to Customers Management in
Banking System using Simulation” (Kaur, Singh, 2017). The term “Queuing theory‟ is
used to define a specialized mathematical theory of queues or waiting lines. Queue
become the general phenomenon in our day to day life. When customers who demand
service have to wait because of the lower number of servers available, then queues are
formed. Queuing systems are developed to resolve the issues of long lines. A queuing
system is in which arrivals place a demand upon a finite capacity resource. If the
demands or the arrival of these demands is unpredictable, then conflict will arise
regarding the use of available resources. Queuing system in banks is an approach which
includes lining up of customers in the bank to be served by a bank employee on each
server. ( Maria, V., 2013).
The main problem that bank faced is the long queue of customers at the peak
hours and then at the non-peak hours the lack of customer entry. ( Vasumathi, A. ,et al.,
2010). In banking sector which is the problem of queuing, waiting , and resource
utilization will affect the customer dissatisfaction. ( Jafar Afshara., et al., 2013). Since
a long time, the problem of bank queuing system still can’t solved and also this
problem can’t be solved completely in short time. ( Tian Haoaa., 2011).
To get the minimum waiting time the inter arrival time and number of service
should be equal to (A= WEIBULL (1.34506,65.0346) , C= 6) and service time should
be equal to (B= NORMAL (227.009,96.5843)). . ( Jafar Afshara., et al., 2013).By
changing the rules of banking system are affect customers and adding skills of all staff
can improve banking performances and customers satisfaction. ( Milad Hatami., et al.,
2014). Customer satisfaction is the most important and most noticeable factor to
investigate bank performances in front of other service companies.
The overall queue and waiting time is relatively long level of customers’
satisfaction is comparatively low. Besides that, the number of open servers is fixed
rather than flexible and The division of working time is uneven. ( Tian Haoaa., 2011).
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The value of utilization factor of servers and rejection percentage of customers obtained
from Excel Spreadsheet is almost equal to the manual simulation, thereby validating
our Cost Analysis approach. ( Satish Verma , et al., 2015).
2.3 Efficiency and effectiveness of the bank performance by decreasing the service
providing time.
One of the factors that impacts the bank performance positively towards its
efficiency and effectiveness is through decreasing the service time provided in each
bank. The value of the average waiting time that the customers have to spend in the
queue can be decreased by using different alternatives investigation. The alternatives
used are training. Training the employees is the effective way which can lead to the
reduction in service time of the counters. Next, by opening a new counter with working
hours from 9.15 am to 5 pm that can serve all types of the customers which same as the
other two counters. Then, through the addition of a new counter and the removed of
service table. Lastly, by adding a new counter and removing service table also
standardizing the shift to all counters (Madadi, N., Roudsari, A. H., Wong, K. Y., &
Galankashi, M. R. 2013).
According to (Abiodun, R. O., 2017), although the number of staff the bank
have is limited but the management of the bank can still distribute the available staff
according to each unit effectively and efficiently which this resulted in the reducing
number of customer’s waiting time which lead to the customer’s satisfaction and also
impacts on the feasible of the estimated queuing model. The performance of a single
queuing system was evaluated and the system by levelling the service staff was sub-
optimized. The customers expected waiting time was computed and their time spent
waiting in line was less that or equal to that was sure (Ullah, A., Iqbal, K., Zhang, X.
D., & Ayat, M., 2014).
Based on the “Bank Service Performance Improvements using Multi Server
Queue System”( Berhan, E., 2015), the total cost based on waiting and systems are
found to be optimum with five servers with 58.4% server utilization. The study shows
the total customers waiting in the systems or in the bank relatively low with five number
of servers as compared with the total number of customers waiting in the systems when
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the number of servers are four as well as six or seven. The study suggested the bank to
use five servers so that it can operate with optimum cost.
2.4 Review of method.
According to Vasumathi, A. ,et al., 2010. “Simulating techniques” was used to
maximize efficiency of banks in order to improve their customer’s service and
increasing long term relationship with them. By using the same resources the
performance can be better than before. Queuing theory was applied to a variety of
business situations. All situations are related to customer involvement.
Based on research that conducted by ( Jafar Afshara., et al., 2013), computer
simulation is an effective technique to simulate the real system in the world for
analysing the complex systems. By using this techniques the bank system where located
in Johor Bahru, Malaysia has been simulated. Basically there are two different queues
in which customers being serviced. This research also applied DOE to assess the factors
of bank Queuing.
Three strategy with each strategy consist of several scenarios were implement
and 17 possible scenarios were compared to achieve all kind of results that can be
imagined. It is expected that it would be helpful for manager to analyse and compare
the results and find the lowest and highest effective elements for improvement.
Simulation Model Development. Bank process a needed to collect necessary data and
stimulate model. Simulation model validation. ( Milad Hatami., et al., 2014). Defining
3 scenarios which is Strategy 1 – Queue, Strategy 2 – Time Interval and Strategy 3 –
Customer satisfaction.
Simulation process was applied in methodology part to conduct the research (
Satish Verma , et al., 2015). There are 8 stages of the simulation process , which are
collection of practical data from the concerned bank for study, calculation of all the
parameters involved in the banking system, survey, generation of survey report,
calculating new values of parameters of banking queue theory, construction of new
model as per the new value of parameters obtained from survey method, calculation of
various cost and profit associated with the different number of servers and selecting the
best out of it, and validation.
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The queuing system of certain bank was applied optimized based on BPR by
enterprise dynamic simulation. ( Tian Haoaa., 2011). Markov Chain were applied from
the description of the problem in banking sectors. ( Maria, M., 2016). In order to
measure the performance of each bank branch and satisfy in a more efficient way customer
needs optimization approach is suitable techniques. ( Maria, V., 2013).
Table 1 : List of performance measures to detect the main problem in Banking sectors.
PROBLEMS AUTHORS
Develop a simulation model of the (Madadi, N., Roudsari, A. H., Wong, K. Y., &
best possible configuration for bank. Galankashi, M. R. 2013)
(M. Mutingi., et al., 2015)
(Ullah, A., Iqbal, K., Zhang, X. D., & Ayat, M., 2014)
(Berhan, E., 2015)
(Jafar Afshara., et al., 2013)
(Hatami, M., Mojib Zahraee, S., Ahmadi, M., Rahimpour
Golroudbary, S., & Mohd Rohani, J. 2014)
Performance of the bank. (Jafar Afshara., et al., 2013) – J1
(Vasumathi, A.,et al., 2010)-J2
(Milad Hatami., et al., 2014) – J4
(Satish Verma, et al., 2015) – J5
(Maria, V., 2013) – J6
Efficiency and effectiveness of the (Madadi, N., Roudsari, A. H., Wong, K. Y., &
bank performance by decreasing the Galankashi, M. R. 2013)
service providing time. (Abiodun, R. O., 2017)
(Ullah, A., Iqbal, K., Zhang, X. D., & Ayat, M., 2014)
(Berhan, E., 2015)
Table 2 : List of methodology
Method AUTHORS
Computer simulation (Jafar Afshara., et al., 2013) – J1
[Link] TEORY (Vasumathi, A.,et al., 2010)-J2
2. DOE (Milad Hatami., et al., 2014) – J4
3. DES (Satish Verma, et al., 2015) – J5
4. DES (WITNESS software) (Madadi, N., Roudsari, A. H., Wong, K. Y., & Galankashi, M.
R. (2013). –J11
5. Discrete event simulation (POM-
(Ullah, A., Iqbal, K., Zhang, X. D., & Ayat, M., 2014). –J8
QM software)
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(Tian Haoaa., 2011) – J3
MATHEMATICAL (Maria, M., 2016) – J7
MODELLING (Maria, V., 2013) – J6
1. Optimization (Abiodun, R. O., 2017). - J10
2. Markov Chain (S. A., Rahman, M. Z., & Rahman, M. M., 2017). –J9
3. Queueing Theory, Linear (Ullah, A., Iqbal, K., Zhang, X. D., & Ayat, M., 2014). –J8
(Berhan, E., 2015). – J12
And Non-Linear Model
3.0 Methodology
3.1 Description of the case study
In this project “Developing a simulation model of the bank Islam
performances”. It discussed about queuing and waiting time in the bank, resources
utilization and the service quality of each counters provided in Bank Islam. We did an
observation and interviews in the Bank Islam which is located in the Varsity Mall,
UUM. The computer simulation approach was used in this study.
Computer simulation is an effective technique to simulate the real system in the
world for analysing the complex systems. In this study, the process of a bank Islam has
been simulated. The bank works 8 hours in a day, 5 days in a week. The bank has 8
counters available to serve the customers who came to the bank Islam.
ARENA Software version 15 has been utilized to simulate the real system of
the bank. This computer simulation package has a pleasant graphical setting which is
capable to model discrete factors. The banking system has been modelled and the
software has been run in this study to produce the results of the banking system model.
3.2 Simulation approach-Chosen
The simulation of a system is the operation of a model of the system (Maria,
1997). In this way, the modeler first builds the model of a system, and then he will make
all the changes needed to find the best configuration with which the system will became
optimized. The simulation can be considered a representation of the system operation
or process over time (Sadoun, 1999).
In this study, a discrete-event simulation (DES) technique was used. DES is one
in which the state of a model changes at only a discrete, but possibly random, set of
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simulated time points (Schriber and Brunner, 1997). This discrete model change could
be understood as the duration of it and may be ignored, face to the duration of the
system. In this study, where in the system is represented by a bank system, the events
are the customer´s arrival, the service´s beginning and the service´s ending, because its
duration are smaller than the hole duration. The event as the attendant´s absence will
not be considered in this study.
3.3 Data collection
In this study, there are two sources of data used which are primary data and
secondary data. The primary data are made up of observation and interview while the
secondary data consists of literature reviews and websites. The data was collected in
three slots session starting from from 10am until 4pm at the bank Islam.
Figure 1 : Flow chart for services counters bank.
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