A tabu search algorithm for a multi-period bank branch location problem: A case study in a Turkish bank

Basar A., Kabak Ö., Topcu Y. İ.

SCIENTIA IRANICA, vol.26, no.6, pp.3728-3746, 2019 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 26 Issue: 6
  • Publication Date: 2019
  • Doi Number: 10.24200/sci.2018.20493
  • Journal Name: SCIENTIA IRANICA
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus
  • Page Numbers: pp.3728-3746
  • Keywords: Integer programming, Decision support system, Tabu Search (TS), Case study, Banking, Location, DYNAMIC FACILITY LOCATION, EFFICIENCY, PERFORMANCE, MODEL, SYSTEM, CHAIN, DEA
  • Istanbul Technical University Affiliated: Yes


Banks need to open new branches in new sites as a result of an increase in the population, promotion of individual earnings, and growth in national economy. In this respect, opening new branches or reorganizing the locations of current branches is an important decision problem for banks to accomplish their strategic objectives. This paper presents a decision support method for multi-period bank branch location problems. The aim is to find bank branch locations based on transaction volume, distance between branches, and cost of opening and closing branches. The proposed method not only develops an integer program and a Tabu Search (TS) algorithm to find the exact places of branches, but also presents a structuring method to identify the related criteria and their importance. We demonstrate the effectiveness of the method on random data. In the final stage, the method is applied to a Turkish bank's branch location problem considering the current and possible places of the branches, availability of the data, and the bank's strategies for a four-year strategic planning. (C) 2019 Sharif University of Technology. All rights reserved.