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Working Paper
Reliability analysis of the Federal Reserve automated payments systems
This paper proposes an analytic framework for the reliability assessment of the automated payments systems used by the Federal Reserve Banks. The failure/recovery behavior of the system currently in operation is modeled as a continuous-time Markov process with varying levels of detail, and the availability is calculated for a wide range of component failure frequencies. Furthermore, alternative system configurations are proposed and analyzed.
Working Paper
Optimal employment of scale economies in the Federal Reserve's currency infrastructure
Given estimates of shipping costs and scale economies for high-speed currency sorting, the authors investigate whether the Federal Reserve might lower its costs by reallocating the volume of sorting among its processing sites.
Journal Article
Optimal use of scale economies in the Federal Reserve’s currency infrastructure
Could the Federal Reserve lower its overall currency processing costs by reallocating its high-speed currency sorting volume? Given estimates of currency shipping costs and scale economies for high-speed sorting, the authors? model minimizes costs by optimal distribution of sorting volumes across possible processing sites, while maintaining levels of service to depository institutions. Their key findings are that most of the potential savings can be achieved without closing any existing processing sites and that locating a new site in Phoenix would help lower System processing costs.