Working Paper
Optimal employment of scale economies in the Federal Reserve's currency infrastructure
Bauer, Paul W.; Reynolds, Gregory; Burnetas, Apostolos; CVSA, Viswanath (1998)
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.
Working Papers (Old Series) , Paper 9810

Journal Article
Optimal use of scale economies in the Federal Reserve’s currency infrastructure
Bauer, Paul W.; Reynolds, Gregory; Burnetas, Apostolos; CVSA, Viswanath (2000-07)
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.
Economic Review , Issue Q III , Pages 13-27