The capacity allocation planning and expansion policy problems considering auxiliary tools

The capacity allocation planning and expansion policy problem in the thin film transistor-liquid crystal display (TFT-LCD) industry is presented in this paper. The capacity allocation and expansion decisions gradually have become a challenging issue. Since the TFT Array stage is the bottleneck of this production network, the research objective is to simultaneously seek an optimal capacity allocation plan and expansion policy in the single-stage, multi-generation and multi-site structures. Capacity allocation decides on profitable product mixes and allocated production quantities of each product group at each production site. Capacity expansion is concerned with determining the timing, types, and sizes of capacity investments, especially in the acquisition of auxiliary tools. This paper proposes a mixed integer linear programming (MILP) to formulate the capacity allocation and expansion model, which considers many practical characteristics and constraints of TFT-LCD manufacturing, such as production capability constraint, multiple capacity types, economic cutting ratio, capacity expansion capability constraint, and high capacity expansion costs.