Modeling and simulation of consumer credit originations processes

Staffing decisions in a consumer credit origination environment have a significant impact on the financial institution´s costs as well as customer service levels. Staff resources account for a substantial portion of the expenses in processing and servicing home equity or consumer loans. This paper describes a staffing model, known as the capacity planning simulation model (CPSM), used in the Originations Division of Wells Fargo Bank´s Consumer Credit Group. The CPSM utilizes process mapping, spreadsheet modeling, and Monte Carlo simulation to model demand uncertainty and process variation, observed during the course of processing a consumer credit loan. We review the model formulation, verification, validation, and application.