The assembly of plastic electronic package requires a sequence of process steps. Every process step induces thermal residual deformation and stresses on the assembled components, which cause mechanical effects on the subsequent process step. In this study, both processing and non-processing models with and without considering the effect of chemical shrinkage on molding compound are built to simulate the package warpage and stresses in assembly. The processing model, a nonlinear model with element birth and death used to activate and deactivate the processing materials, can more realistically simulate a series of assembly processes in a plastic package. Due to negligence of the intermediate step, the package warpage and stresses predicted by non-processing model are in significant error.