Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations

Aditya P. Rastogi, John W. Fowler, W. Matthew Carlyle, Ozgur M. Araz, Arnold Maltz, Burak Büke

Research output: Contribution to journalArticle

23 Citations (Scopus)

Abstract

A semiconductor supply network involves many expensive steps, which have to be executed to serve global markets. The complexity of global capacity planning combined with the large capital expenditures to increase factory capacity makes it important to incorporate optimization methodologies for cost reduction and long-term planning. The typical view of a semiconductor supply network consists of layers for wafer fab, sort, assembly, test and demand centers. We present a two-stage stochastic integer-programming formulation to model a semiconductor supply network. The model makes strategic capacity decisions, (i.e., build factories or outsource) while accounting for the uncertainties in demand for multiple products. We use the model not only to analyze how variability in demand affects the make/buy decisions but also to investigate how the correlation between demands of different products affects these strategic decisions. Finally, we demonstrate the value of incorporating demand uncertainty into a decision-making scheme.

Original languageEnglish (US)
Pages (from-to)322-332
Number of pages11
JournalInternational Journal of Production Economics
Volume134
Issue number2
DOIs
StatePublished - Dec 2011

Fingerprint

Semiconductor materials
Planning
Industrial plants
Integer programming
Cost reduction
Decision making
Supply network
Capacity planning
Uncertain demand
Semiconductor manufacturing
Semiconductors
Uncertainty
Factory
Demand correlation
Global market
Strategic decisions
Long-term planning
Capital expenditures
Methodology
Demand uncertainty

Keywords

  • Production planning
  • Semiconductor manufacturing
  • Stochastic programming
  • Supply network capacity

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cite this

Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations. / Rastogi, Aditya P.; Fowler, John W.; Matthew Carlyle, W.; Araz, Ozgur M.; Maltz, Arnold; Büke, Burak.

In: International Journal of Production Economics, Vol. 134, No. 2, 12.2011, p. 322-332.

Research output: Contribution to journalArticle

Rastogi, Aditya P. ; Fowler, John W. ; Matthew Carlyle, W. ; Araz, Ozgur M. ; Maltz, Arnold ; Büke, Burak. / Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations. In: International Journal of Production Economics. 2011 ; Vol. 134, No. 2. pp. 322-332.
@article{2cf56f2846b642ef901490b03f97a65d,
title = "Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations",
abstract = "A semiconductor supply network involves many expensive steps, which have to be executed to serve global markets. The complexity of global capacity planning combined with the large capital expenditures to increase factory capacity makes it important to incorporate optimization methodologies for cost reduction and long-term planning. The typical view of a semiconductor supply network consists of layers for wafer fab, sort, assembly, test and demand centers. We present a two-stage stochastic integer-programming formulation to model a semiconductor supply network. The model makes strategic capacity decisions, (i.e., build factories or outsource) while accounting for the uncertainties in demand for multiple products. We use the model not only to analyze how variability in demand affects the make/buy decisions but also to investigate how the correlation between demands of different products affects these strategic decisions. Finally, we demonstrate the value of incorporating demand uncertainty into a decision-making scheme.",
keywords = "Production planning, Semiconductor manufacturing, Stochastic programming, Supply network capacity",
author = "Rastogi, {Aditya P.} and Fowler, {John W.} and {Matthew Carlyle}, W. and Araz, {Ozgur M.} and Arnold Maltz and Burak B{\"u}ke",
year = "2011",
month = "12",
doi = "10.1016/j.ijpe.2009.11.006",
language = "English (US)",
volume = "134",
pages = "322--332",
journal = "International Journal of Production Economics",
issn = "0925-5273",
publisher = "Elsevier",
number = "2",

}

TY - JOUR

T1 - Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations

AU - Rastogi, Aditya P.

AU - Fowler, John W.

AU - Matthew Carlyle, W.

AU - Araz, Ozgur M.

AU - Maltz, Arnold

AU - Büke, Burak

PY - 2011/12

Y1 - 2011/12

N2 - A semiconductor supply network involves many expensive steps, which have to be executed to serve global markets. The complexity of global capacity planning combined with the large capital expenditures to increase factory capacity makes it important to incorporate optimization methodologies for cost reduction and long-term planning. The typical view of a semiconductor supply network consists of layers for wafer fab, sort, assembly, test and demand centers. We present a two-stage stochastic integer-programming formulation to model a semiconductor supply network. The model makes strategic capacity decisions, (i.e., build factories or outsource) while accounting for the uncertainties in demand for multiple products. We use the model not only to analyze how variability in demand affects the make/buy decisions but also to investigate how the correlation between demands of different products affects these strategic decisions. Finally, we demonstrate the value of incorporating demand uncertainty into a decision-making scheme.

AB - A semiconductor supply network involves many expensive steps, which have to be executed to serve global markets. The complexity of global capacity planning combined with the large capital expenditures to increase factory capacity makes it important to incorporate optimization methodologies for cost reduction and long-term planning. The typical view of a semiconductor supply network consists of layers for wafer fab, sort, assembly, test and demand centers. We present a two-stage stochastic integer-programming formulation to model a semiconductor supply network. The model makes strategic capacity decisions, (i.e., build factories or outsource) while accounting for the uncertainties in demand for multiple products. We use the model not only to analyze how variability in demand affects the make/buy decisions but also to investigate how the correlation between demands of different products affects these strategic decisions. Finally, we demonstrate the value of incorporating demand uncertainty into a decision-making scheme.

KW - Production planning

KW - Semiconductor manufacturing

KW - Stochastic programming

KW - Supply network capacity

UR - http://www.scopus.com/inward/record.url?scp=77957822822&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=77957822822&partnerID=8YFLogxK

U2 - 10.1016/j.ijpe.2009.11.006

DO - 10.1016/j.ijpe.2009.11.006

M3 - Article

AN - SCOPUS:77957822822

VL - 134

SP - 322

EP - 332

JO - International Journal of Production Economics

JF - International Journal of Production Economics

SN - 0925-5273

IS - 2

ER -