This article surveys a new generation of analytical tools for capacity planning and management, especially in high-tech industries such as semiconductors, electronics and bio-techs. The objectives of the article are to (1) identify fundamental theory driving current research in capacity management, (2) review emerging models in operations research, game theory, and economics that address strategic, tactical and operational decision models for high-tech capacity management, and (3) take an in-depth look at capacity-optimization models developed in the specific context of semiconductor manufacturing. The goal of this survey is to go beyond typical production-planning and capacity-management literature and to examine research that can potentially broaden capacity-planning research.

This paper studies the scheduling/rescheduling problem in a multi-resource FMS environment. Several reactive scheduling policies are proposed to address the effects of machine breakdowns and processing time variations. Both off-line and on-line scheduling methods are tested under a variety of experimental conditions. The performance of the system is measured for mean tardiness and makespan criteria. The relationships between scheduling frequency and other scheduling factors are investigated. The results indicated that a periodic response with an appropriate period length would be sufficient to cope with interruptions. It was also observed that machine breakdowns have more significant impact on the system performance than processing time variations. In addition, dispatching rules were found to be more robust to interruptions than the optimum-seeking off-line scheduling algorithm. A comprehensive bibliography is also included in the paper.

We study strategic capacity planning in the semiconductor industry. Working with a major US semiconductor manufacturer on the configuration of their worldwide production facilities, we identify two unique characteristics of this problem as follows: (1) wafer demands and manufacturing capacity are both main sources of uncertainty, and (2) capacity planning must consider the distinct viewpoints from marketing and manufacturing. We formulate a multi-stage stochastic program with demand and capacity uncertainties. To reconcile the marketing and manufacturing perspectives, we consider a decomposition of the planning problem resembling decentralized decision-making. We develop recourse approximation schemes representing different decentralization schemes, which vary in information requirements and complexity. We show that it is possible to arrive at near optimal solutions (within 6.5%) with information decentralization while using a fraction (16.2%) of the computer time.

We study incentive issues that arise in semiconductor capacity planning and allocation.Motivated by our experience at a major U.S. semiconductor manufacturer, we model the capacity-allocation problem in a game-theoretic setting as follows: each product manager (PM) is responsible for a certain product line, while privately owning demand information through regular interaction with the customers. Capacity-allocation is carried out by the corporate headquarters (HQ), which allocates manufacturing capacity to product lines based on demand information reported by the PMs. We show that PMs have an incentive to manipulate demand information to increase their expected allocation, and that a carefully designed coordination mechanism is essential for HQ to implement the optimal allocation. To this end, we design an incentive scheme through bonus payments and participation charges that elicits private demand information from the PMs. We show that the mechanism achieves budget-balance and voluntaryparticipation requirements simultaneously. The results provide important insights into the treatment of misaligned incentives in the context of semiconductor capacity-allocation.

This paper presents a new algorithm for the¯exible manufacturing system (FMS) scheduling problem. The proposed algorithm is a heuristic based on ®ltered beam search. It considers ®nite buer capacity, routing and sequence¯exibilities and generates machine and automated guided vehicle (AGV) schedules for a given scheduling period. A new deadlock resolution mechanism is also developed as an integral part of the proposed algorithm. The performance of the algorithm is compared with several machine and AGV dispatching rules using mean¯ow time, mean tardiness and makespan criteria. It is also used to examine the eects of scheduling factors (i.e., machine and AGV load levels, routing and sequence¯exibilities, etc.) on the system performance. The results indicate that the proposed scheduling algorithm yields considerable improvements in system performance over dispatching rules under a wide variety of experimental conditions.