Assignment On Production And

Operations Management

Process Of ATM Machine

Submitted To: Submitted By:
Dr. Garima J. Chandra Anusha Tandon
Mam 180020500004
MBA 2nd Semester
2018 -2020
 CONTENT
INTRODUCTION ................................................................................... 9
Location ..................................................... Error! Bookmark not defined.
AUTOMATED TELLING MACHINE BLOCK DIAGRAM .............. 11
Functions of the Cash Dispenser ...................................................... 13
ATM Networking: ............................................................................... 16
2 Types of ATM Machines ............................................................... 16
ATM Security: ..................................................................................... 17
Automated Teller Machine Working Principle: ........................... 18
Advantages of Automated Teller Machine: ................................. 20
Features of Automated Teller Machine: ....................................... 20
Functions of the Cash Dispenser ...................................................... 21
Uses of ATM ........................................................................................ 22
 OBJECTIVES
The objective of an ATM machine is to provide Anytime or
Automated Banking services to the bank customers without
the customer having to make a trip to the bank. Some of the
services an ATM provide are:
1. Cash withdrawal
2. Accept Deposits
3. Issue Balance Statements
4. Pre-paid mobile recharge
5. Money Transfer
6. Buying Insurance

TIME LINE
Assignment Timeline: Create a report on process of ATM machine
Due Date: 30.March.2019

Timeline / Due Dates:

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1.Decided the 2.Research on 3.Planned out 4.Check and

Process of ATM Internet write up discuss with
significant adults

5. Edited the 6.Created write

write up. up

1 Brainstorm/Research
Downloaded and researched the information
www.scribd.com
Google
2 Research/Select relevant info
 Highlight relevant sections
 Rewrite in own words
 Choose pictures

2 Plan
How , What , When is to be searched
Chose data and saved

4 Write / Make / Create 1 (Notes)

Started to create write up according to the plan

5 Write/Make/Create 2 (Notes)
Write up work continued

6 Check with significant adult/Discuss/Edit/Practice

7 Created ,designed and edited the write up

8 Final editing was done

RESEARCH
METHODOLOGY
Literature Survey:
There are many forecasting techniques available in literature regarding cash
inventory of ATMs including methods for
the detection, estimation and adjustment of time series. Cleveland and
Devlin [9, 10] established a distribution of
withdrawal frequencies for monthly time series on the basis of a large
sample. They found the main frequencies for these
time series. Brentnall et al. [7] developed a random-effects point
process model for automated teller machine
withdrawals. They claimed their model to be used in behavior forecasting of
an individual. Miller and Orr [23], argued
that the cash flow is mostly unpredictable as the cash balance fluctuates
irregularly over the time. Their research
conclusions were confirmed by Premachandra [25], and it was found that the
lack of demand visibility is considered a
major challenge in cash management and optimization.
Research has found that service quality in banks is critical for satisfaction and
retention of customers [18]. Yavas et al.
[36] argued that customer-focused ATM delivery systems that fulfill their
needs and maximize operational performance
are essential dimensions for banks to achieve and sustain competitive
advantage. Adendorff [2] presented a scientifically-
based decision-making procedure to determine the amount of cash to be held
at a cash point of a retail bank at any time
without compromising customer service levels or incurring undue
expenditure. Armenise et al. [4] presented an
application of genetic algorithms (GA) as meta-heuristics for searching and
generating optimal upload strategies, able at
the same time to minimize the daily amount of stocked money and to assure
cash dispensing service. Dilijonas et al. [16]
examined the essential aspects of ATM service quality in Baltic States.
They identified adequate number of ATMs,
convenient and secure location and user-friendly system as essential
resources for providing quality to customers.
Lovelock [22] identified the dimension of ATM service quality such as
secure and convenient location, adequate number
of ATM, user-friendly system, and functionality of ATM.
Recently, some authors attempted to optimize the cash by modeling
and forecasting the demand. Wagner [33]
determined the optimal cash deployment strategy-modeling a network of
automated teller machines. Simutis et al. [27]
used ANN to forecast a daily cash demand and optimal cash load for every
ATM with the argument that cost of cash,
cost of cash uploading and cost of daily services play an essential role on
cash management. They considered these
factors in their model and used simulation technique to analyze the results. In
another work, Simutis et al. [28] developed
two techniques to forecast the daily cash demand for ATM including
artificial neural network and support vector
regression. This problem can be related with a classic issue: the transaction
demand for the cash, which began with [6]
and [31], and more recently with [3].
Various studies have been carried out to understand the customer behavior
and factors determining the quality service at
ATMs. Humphrey [20] found that electronic payments are cheaper than
paper-based alternatives and ATMs are more
cost-efficient to deliver customer services than the branch offices. This Cost–
efficiency influences customer decision in
cash withdrawal. Joseph and Stone [19] studied adequate number of ATMs,
convenient and secure location, speed, cash
backup and cost to be essential service quality aspects of ATM. Snellman and
Virn [29] investigated the market structure
in banking and its influence on the choice of means of payment and demand
for cash. They reported that monopoly banks
had an incentive to restrict the number of ATMs to a minimum. They found
that demand for cash is dependent on the
number of ATMs and the popularity of other means of payment. Thus, the
use of cash can be fairly well explained in a
transaction demand framework. Whittaker and Introna [34] studied that ATM
is the dominant mode of access to cash for
those living in industrialized societies. Vasumathi and Dhanavanthan [32]
used simulated method to reduce idle time of
servers and waiting time of customers for any bank having ATM facility.
Teddy and Ng [30] proposed to implement a
local learning technique of the pseudo self-evolving cerebellar model
articulation controller associative memory network to generate accurate
predictions of ATM cash demands. According to them, a computational
model of the human cerebellum could incorporate local learning to model
the complex dynamics of time series effectively. They evaluated
the predicting performance of PSECMAC model against CI and regression
models.
Ramirez et al. [26] compared various dynamic models including
Multilayer Perceptron (MLP) and Support vector
Machine (SVM) to forecast the daily ATM cash demand and found that MLP
presented the best results. Armenise et al.
[5] investigated the optimization of ATM cash by means of genetic
algorithm in order to produce optimal upload
strategies for minimizing daily amount of stocked money. In similar work
Dijonas et al. [13] elaborated a model based on
combination of neural networks and multi-agent technology. In particular,
data are gathered by agents from ATM
network, and delivered to neural network for prognosis and optimization.
Fuzzy ARTMAP has been successfully applied
to many applications including intrusion detection [8], medical [17], pattern

classification [21] etc.

PROJECT
PRESENTATION
INTRODUCTION
The automated teller machine (ATM) is an automatic banking machine
(ABM) which allows customer to complete basic transactions without any
help of bank representatives. There are two types of automated teller machine
(ATMs). The basic one allows the customer to only draw cash and receive a
report of the account balance. Another one is a more complex machine which
accepts the deposit, provides credit card payment facilities and reports
account information.

It is an electronic device which is used by only bank customers to process

account transactions. The users access their account through special type of
plastic card that is encoded with user information on a magnetic strip. The
strip contains an identification code that is transmitted to the bank’s central
computer by modem. The users insert the card into ATMs to access the
account and process their account transactions. The automated teller machine
was invented by john shepherd-Barron in year of 1960.
 Location

.
ATMs can be placed at any location but are most often placed near or inside
banks, shopping centers/malls, airports, railway stations, metro stations,
grocery stores, petrol/gas stations, restaurants, and other locations. ATMs are
also found on cruise ships and on some US Navyships, where sailors can
draw out their pay.[42]
ATMs may be on- and off-premises. On-premises ATMs are typically more
advanced, multi-function machines that complement a bank branch's
capabilities, and are thus more expensive. Off-premises machines are
deployed by financial institutions and Independent Sales Organisations
(ISOs) where there is a simple need for cash, so they are generally cheaper
single function devices.
In the US, Canada and some Gulf countries, banks may have drive-thru lanes
providing access to ATMs using an automobile.
In recent times, countries like India and some countries in Africa are
installing ATMs in rural areas, which are solar powered.[
 AUTOMATED TELLING MACHINE BLOCK
DIAGRAM
The automated teller machine consists of mainly two input devices and four
output devices that are;

Input Devices:

 Card reader
 Keypad
Output Devices:

 Speaker
 Display Screen
 Receipt Printer

As told earlier, there are mainly two input devices and four output devices for
an ATM. The input devices are

 Card Reader – This is a part of the identification of your particular account

number. For this the magnetic stripe on the back of the ATM card is either
swiped or pressed on the card reader so that it captures your account
information. To understand the account information of the user, the data from
the card is passed on to the host processor. The host processor thus uses this
data to get the information from the card holder’s bank.
 Keypad – After the card is recognized, the machine asks further details like
the type of withdrawal you prefer, your balance enquiry, and your personal
identification number (PIN) and so on. Since each card has a unique PIN
number, there is very little chance for someone else to withdraw money from
your account. There are also separate laws to protect the PIN code while
sending it to the host processor. So, the PIN number is mostly sent in
encrypted form.
 Parts of an ATM machine

If your pin number is correct the ATM makes the necessary transactions for
the required amount.

For this transaction, there are mainly four outputs. They are

 Speaker – When a particular key is pressed, the speaker provides the

feedback as audio.
 Display Screen – The questions asked by the ATM machine regarding the
transaction and the input from the user is all displayed on the display screen.
Each step of withdrawal is shown by the display screen. A CRT screen or
even an LCD screen is commonly used as an LCD screen.
 Receipt printer – All the details regarding your withdrawal like the date and
time and the amount withdrawn and also the balance amount in the bank is
also shown in the receipt. Thus a paper receipt of the current transaction is
obtained by the user.
 Cash dispenser – This is the central system of the ATM machine. This is
from where the required money is obtained. From this portion the person can
collect the money.
Functions of the Cash Dispenser
As the whole mechanism is regarding the withdrawal of cash, the cash
dispenser should be highly efficient. These are the main functions that are to
be carried out by the cash dispenser.

It is the duty of the cash dispenser to count each bill and give the required
amount. If there are cases where the bills are stuck together they should be
rejected and instead new notes should be taken. If the money is worn, or even
folded, they will be moved to another section called the reject bin. All these
actions are carried out by high-precision sensors.

There may be cases where the sensors may go wrong. To know this, the
person responsible for the machine checks the number of rejected notes at a
certain interval. If the numbers of notes are a lot than expected, then it would
indicate that either the quality of the bills is not good or there is a problem
with the cash dispenser.

A complete record of each transaction made by a particular ATM machine is

recorded each day and is kept as a journal. This journal is later collected and
then printed out at times. This information regarding the transaction is kept
by the authorities for a period of 2 years. As there may be cases regarding a
particular transaction going wrong, the account owner or also the bank
officers have a right to see the transaction. With this printout the account
holder can contact the host processor.
Automatic Teller Machine Block Diagram

Automated Teller Machine Card Reader

Automated Teller Machine keypad

Automated Teller Machine LCD Display

ATM Networking:
The internet service provider (ISP) also plays an important role in the ATMs.
This provides communication between ATM and host processors. When the
transaction is made, the details are input by the card holder. This information
is passed on to the host processor by the ATM machine. The host processor
checks these details with authorized bank. If the details are matched, the host
processor sends the approval code to the ATM machine so that the cash can
be transferred. When a transaction is made, the details are inputted by the
card holder. This information is passed on to the host processor by the ATM
machine. The host processor checks these details with the authorized bank. If
the details are correct, the requested cash by the card holder is taken with the
help of an electronic fund from the customer’s bank account to the host
processor’s account. After this function is carried out, the processor sends an
approval code to the ATM machine so that the cash can be transferred.

Automated Teller Machine Networking

2 Types of ATM Machines

 Most of the host processors can support either leased line or dial up machines

 Leased line ATM machines

 Dial up ATM machines
Leased Line ATM Machines:

The leased line machines connect direct to the host processor through a four
wire point to point dedicated telephone line. These types of machines are
preferred in place. The operating cost of these machines is very high.

Dial Up ATM Machines:

The dial up ATMs connects to the host processor through a normal phone
line using a modem. These require a normal connections their and their initial
installation cost is very less. The operating cost of these machines is low
compared with leased line machines.

ATM Security:
 The ATM card is secured with PIN number which is kept secret. There is no
way to get the PIN number from your card. It is encrypted by the strong
software like Triple data Encryption Slandered. An ATM card is secured as
long as the PIN number is kept as a secret. There is no way to get the PIN
number from your card as it is encrypted by strong software’s like Triple
Data Encryption Standard. To keep your PIN number secure, there are a
number of ways.
 Select your own PIN number. Select a PIN number which is easy to
remember. It should not be anything that is associated to your birth date,
phone number or anything personal. Do not write down the PIN number on
the back of your ATM card.

Here are some tips on how to keep your ATM card safely.
 Your ATM card should be kept safely without being scratched or bent. Keep
it in your purse or somewhere else safe.
 Take out the card from your purse before reaching the ATM counter. There is
more chance for an attack if you are standing in front of the ATM.
 After entering the ATM counter close the door and then only turn around to
the screen. Stand directly in front of the keypad, so that no one else sees the
number you are pressing.
 After receiving the money, do not start counting the money right away. Put
the money inside your purse at once. Keep the card also safely.
 There may also be cases where you may not receive the money because of a
faulty ATM machine. In such cases, do not forget to take the ATM card.
 If you are ever forced to take the money out of an ATM machine by a
stranger, just enter the number in the reverse order. For example, if your real
PIN number is 1234 enter it as 4321. This will send a signal to the nearby
police control room. Thus you can get help at the earliest.

Automated Teller Machine Working Principle:

Automated Teller Machine Circuit Diagram

The automated teller machine is simply a data terminal with two input and
four output devices. These devices are interfaced to the processor. The
processor is heart of the ATM machine. All the ATM machines working
around the world are based on centralized database system. The ATM has to
connect and communicate with the host processor (server). The host
processor is communicating with the internet service provider (ISP). It is the
gateway through all the ATM networks available to the card holder.

Automated Teller Machine Architecture

When a card holder wants does an ATM transaction, user provides necessary
information through card reader and keypad. The ATM forwards this
information to the host processor. The host processor enters the transaction
request to the cardholder bank. If the card holder requests the cash, the host
processor takes the cash from the card holder account. Once the funds are
transferred from the customer account to host processor bank account, the
processor sends approval code to the ATM and the authorized machine to
dispense the cash. This is the way to get the amount on ATMs. The ATM
network is fully based on centralized database environment. This will make
life easer and secured the cash.

Advantages of Automated Teller Machine:

 The ATM provides 24 hours service
 The ATM provides privacy in banking communications
 The ATMs reduce the work load banks staff
 The ATM may give customer new currency notes
 The ATMs are convenient to banks customers
 The ATM is very beneficial for travelers
 The ATM provide services without any error

Features of Automated Teller Machine:

 Transfer funds between linked bank accounts
 Receive account balance
 Prints recent transactions list
 Change your pin
 Deposit your cash
 Prepaid mobile recharge
 Bill payments
 Cash withdrawal
 Perform a range of feature in your foreign language.

Any ATM machine needs a data terminal with two inputs and four output
devices. Of course, for this to happen there should also be the availability of a
host processor. The host processor is necessary so that the ATM can connect
and also communicate with the person requesting the cash. The Internet
Service Provider (ISP) also plays an important role in this action. They act as
the gateway to the intermediate networks and also the bank computer.

A leased-line ATM machine has a 4-wire, point to point dedicated telephone

line which helps in connecting it with the host processor. These types of
machines are preferred in places where the user volume is high. They are
considered high end and the operating costs of this type of a machine is very
high.

The dial-up ATM machines only has a normal phone line with a modem and
a toll free number. As these are normal connections their initial installation
cost is very less and their operating costs only become a fraction of that of a
leased-line ATM.

The host is mainly owned by the bank. It can also be owned by an ISP. If the
host is owned by the bank only machines that work for that particular bank
will be supported.

Functions of the Cash Dispenser

As the whole mechanism is regarding the withdrawal of cash, the cash
dispenser should be highly efficient. These are the main functions that are to
be carried out by the cash dispenser.

It is the duty of the cash dispenser to count each bill and give the required
amount. If there are cases where the bills are stuck together they should be
rejected and instead new notes should be taken. If the money is worn, or even
folded, they will be moved to another section called the reject bin. All these
actions are carried out by high-precision sensors.

There may be cases where the sensors may go wrong. To know this, the
person responsible for the machine checks the number of rejected notes at a
certain interval. If the numbers of notes are a lot than expected, then it would
indicate that either the quality of the bills is not good or there is a problem
with the cash dispenser.

A complete record of each transaction made by a particular ATM machine is

recorded each day and is kept as a journal. This journal is later collected and
then printed out at times. This information regarding the transaction is kept
by the authorities for a period of 2 years. As there may be cases regarding a
particular transaction going wrong, the account owner or also the bank
officers have a right to see the transaction. With this printout the account
holder can contact the host processor.
 Uses of ATM
 Since ATM machines are found almost everywhere, you need not have to
carry a huge amount in your hand. Whenever you need money, you can take
it from the nearby ATM counter. All you have to do is carry the ATM card
wherever you go. Sine the ATM card has a unique password, no one can
access it even if it is stolen.
 An independent ATM host can access any bank. It also supports a large
number of ATMs placed with different merchants.
 There is also Braille equipped ATMs that provide access of money even to
the blind and visually impaired people.