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.