Simulation-based optimization for integrated production planning and capacity expansion decisions

• Published in: 2016 Winter Simulation Conference (WSC) pp. 2992 - 3003
• Main Authors: Ziarnetzky, Timm, Monch, Lars
• Format: Conference Proceeding
• Language: English
• Published: IEEE 01.12.2016
• Subjects: Capacity planning; Indexes; Iron; Optimization; Planning; Semiconductor device modeling
• ISSN: 1558-4305
• DOI: 10.1109/WSC.2016.7822333

In this paper, we consider a simplified semiconductor supply chain that consists of a single front-end facility and back-end facility. We present a production planning formulation that is based on clearing functions. A cost-based objective function is considered. The minimum utilization of expensive bottleneck machines in the front-end facility is a parameter of the model. At the same time, the less expensive capacity of the back-end facility can be increased to reduce the cycle time in the back-end facility. The release schedules obtained from the planning formulations are assessed using discrete-event simulation. An overall cycle time larger than a given maximum value is penalized. Simulated annealing is used to determine appropriate minimum utilization levels for the front-end bottleneck machines and appropriate capacity expansion levels for the back-end. The results of the computational experiments demonstrate that the profit can be increased while the maximum possible overall cycle time is not violated.