Modeling the Material Allocation System for TFT-LCD Module Factories Based on Make-to-Stock Production

The TFT-LCD module factories are in charge of the last process of the TFT-LCD supply chain, i.e., assembling LCD panels (produced from the former process in the supply chain) as well as electronic components into TFT-LCD panels or the finished products using TFT-LCD panels. Since the variation of machine processes and production techniques at the former process of the supply chain results in a variety of qualities of LCD panels, the finished products assembled with those LCD panels of different qualities are also of different qualities, according to which they are classified into different grades. This paper models the material allocation system for a TFT-LCD module factory based on the make-to-stock (MTS) production, in which one of the main designs is to allow the flexibility that the finished products of higher grades are able to be downgraded to respond to the drastic variation of customer requirements for each grade of finished products. The system is modelled in detail by an integer programming approach that takes into account not only downgraded products but also the customer requirements for the quality qualification rate and the lower bound of non-dot-defect rate of products, to maximize the total profit of the product portfolio. The model is evaluated by conducting an experimental study for a numerical example, which turns out that the proposed system looks promising as it determines a feasible product portfolio that decreases both the inventory of LCD panels and the volume of unqualified products while maintaining a high profit.