A decision problem for bank branch site selection: A GIS Mapping perspective with Maximal Covering Location Problem: A case study of Isfahan, Iran

TL;DR

This paper develops a GIS-based model combined with the Maximal Covering Location Problem to optimize bank branch site selection, maximizing customer coverage and market potential in Isfahan, Iran.

Contribution

It introduces an integrated GIS and MCLP approach for strategic bank branch site selection, considering multiple demographic and logistical criteria.

Findings

The model effectively identified optimal branch locations.

Results showed increased customer coverage and market reach.

The approach proved efficient and applicable in real-world settings.

Abstract

One of the most significant decision-making processes is the site selection. If the site correctly selected, the access for the best customers as well as the greatest market potential would be guaranteed. Bank branch optimal location is one of the most significant strategic issues in the competitive market especially for private banks because of the global competition and high customer expectations. This study presents a Geographic Information System (GIS) based model for locating suitable sites for making new branches by using data sources. Also, Maximal Covering Location Problem (MCLP) was used to select branches that the maximum demand might be reached within a pre-specified target travel time. The model was implemented for Ansar bank in Isfahan, Iran. The criteria were restricted through demographic attributes, competition, transportation, flexibility and cost in GIS mapping approach. Finally, the results illustrated the efficiency and applicability of the proposed integrated method.