Semiconductor Manufacturer’s Capacity Reservation with Substitution

Abstract:

When the products are withdrawn from the market, some capacity is reserved for a certain time because the manufacturer is responsible for providing after-sale service during the entire quality guarantee period. We consider a capacity reservation problem of a semiconductor manufacturer with two kinds of products and the corresponding demands are random. The demands can be substituted when one type of capacity has been depleted. The optimization goal is to determine the reserved capacity for each type of product. The problem is formulated by a stochastic programming model in which the objective is to minimize the total service cost of the manufacturer. We show that the concavity and convexity of the optimal function is depended on the joint distribution function density of the products. An iterative algorithm is designed to find the optimal capacity conservation quantities and a numerical experiment is used to illustrate its effectiveness.

• Periodical: Applied Mechanics and Materials (Volumes 182-183)
• Pages: 571-575
• DOI: https://doi.org/10.4028/www.scientific.net/AMM.182-183.571
• Online since: June 2012
• Authors: Guang Hua Han, Ming Dong
• Keywords: After-Sale Service, Capacity Reservation, Semiconductor, Substitution

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