A capacity allocation and expansion model for TFT-LCD multi-site manufacturing

This paper presents a capacity allocation and expansion problem of thin film transistor liquid crystal display (TFT-LCD) manufacturing in a multi-site environment. Capacity allocation and expansion decisions have become more challenging issues because of the following: (1) complex product hierarchy caused by a wide range of product types and applications, (2) coexistence of multiple generations of manufacturing technologies in the multi-stage production network, and (3) rapidly growing and changing market demands due to the replacement of the traditional cathode ray tube. Since the Array stage is the bottleneck of this production network, our research objective is to simultaneously seek an optimal capacity allocation plan and capacity expansion policy under single-stage, multi-generation, and multi-site structures. Capacity allocation determines the profitable product mixes and allocated production quantities for each product group at each production site. Capacity expansion determines timing, types, and sizes of capacity investments, especially in the acquisition of auxiliary tools. This study proposes a mixed integer linear programming to formulate the whole model of capacity allocation and expansion, which considers the practical characteristics and constraints of TFT-LCD manufacturing. Finally, an industrial case study modified from a Taiwanese TFT-LCD manufacturer is illustrated and a sensitivity analysis of some influential parameters is also addressed.