A Comparative Study on Timing and Sizing Models of Capacity Investment
Date Issued
2009
Date
2009
Author(s)
Sung, Wen-Chi
Abstract
High-tech manufacturing industries are faced with uncertain product demand, high capacity investment cost, and rapid technology advancement. Also the notable business cycle often makes the demand and supply imbalance, thus increasing the operating risk. And the imbalance of supply and demand is one of the main factors that influences the manufacturer’s profit. However the uncertain demand is the factor that can''t be controlled, therefore the controllable supply become the key to profit. Hence, the capacity investment decision of the firm will determine its profitability and long term competitiveness.ost capacity investment problems study the timing and sizing of capacity. Timing strategies decide when to build capacity and its decision variable is the “time”. And the sizing strategies decide how much capacity to build, the decision variables is “volume”.o time, or to size, that is the research question of this thesis. This study proposes a fair comparison method to comprehend the performance and behavior of the two capacity strategies. There are many uncertainties of semiconductor manufacturing industry, such as demand and technology. This study focuses on the effect of the demand variation upon the choice of capacity planning methods. Results obtained in this study are the timing model has a better performance in highly uncertain environment, and it is a more active capacity investment strategy rather than sizing model is a more conservative one.
Subjects
capacity planning
timing
sizing
semiconductor manufacturing
Type
thesis
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