Semiconductor lot allocation using robust optimization |
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Authors: | Tsan Sheng Ng Yang Sun John Fowler |
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Institution: | 1. Department of Industrial and Systems Engineering, National University of Singapore, Singapore 119260, Singapore;2. College of Business Administration, California State University, Sacremento, CA 95819-6088, United States;3. Department of Industrial Engineering, Arizona State University, Tempe, AZ 85287-5906, United States |
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Abstract: | In this work, the problem of allocating a set of production lots to satisfy customer orders is considered. This research is of relevance to lot-to-order matching problems in semiconductor supply chain settings. We consider that lot-splitting is not allowed during the allocation process due to standard practices. Furthermore, lot-sizes are regarded as uncertain planning data when making the allocation decisions due to potential yield loss. In order to minimize the total penalties of demand un-fulfillment and over-fulfillment, a robust mixed-integer optimization approach is adopted to model is proposed the problem of allocating a set of work-in-process lots to customer orders, where lot-sizes are modeled using ellipsoidal uncertainty sets. To solve the optimization problem efficiently we apply the techniques of branch-and-price and Benders decomposition. The advantages of our model are that it can represent uncertainty in a straightforward manner with little distributional assumptions, and it can produce solutions that effectively hedge against the uncertainty in the lot-sizes using very reasonable amounts of computational effort. |
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Keywords: | Semiconductor supply chain Lot assignment Uncertainty modeling Robust optimization Generalized Benders Branch-and-price |
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