A stochasticprogrammingmodelforstrategiccapacityplanninginthinfilm transistor-liquidcrystaldisplay(TFT-LCD)industry

This paperstudiesstrategiccapacityplanningproblemsunderdemanduncertaintiesinthinfilm transistor-liquidcrystaldisplay(TFT-LCD)industry.Duetothefollowingtrends,capacityplanninghas become acriticalstrategicissueinTFT-LCDindustry:(1)complexproducthierarchyandproducttypes caused byawiderangeofproductapplications;(2)coexistenceofmultiplegenerationof manufacturingtechnologiesinamulti-siteproductionsystem;and(3)rapidgrowingandchanging marketdemandderivedbytheneedsforreplacingtraditionalcathoderaytube(CRT)display. Furthermore,demandforecastsareusuallyinaccurateandvaryrapidlyovertime. Our researchobjectiveistoseekacapacityallocationandexpansionpolicythatisrobusttodemand uncertainties.WeconsiderspecialcharacteristicsofTFT-LCDmanufacturingsystemssuchasdemand uncertainties,limitedconfigurationflexibility,andcuttingratios.Thispaperproposesascenario-based two-stagestochasticprogrammingmodelforstrategiccapacityplanningunderdemanduncertainties. Comparingtothedeterministicapproach,ourstochasticmodelsignificantlyimprovesystem robustnessunderdemanduncertainties.