Capacity Planning in the Face of Product-Mix Uncertainty

Each wafer makes 300 to 400 visits to different

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Unformatted text preview: ircuitry. Each wafer makes 300 to 400 visits to different process equipment during its manufacture. At any time, Headway has ten to twenty products in production, each with its own unique process flow. Each product is typically produced for only a few months before Frank Chance FabTime Inc. Menlo Park, CA, U.S.A. being replaced by a new, advanced version. New products typically start out as low-volume R&D projects but sometimes ramp quickly into mass production when they are qualified and approved by a customer. In this environment, although total production volume can be forecast with some degree of accuracy, the mix of individual products is difficult to predict, along with its effect on the company’s capital-equipment needs. Headway’s longest-lead-time capital equipment must be ordered approximately one year in advance of need. The company therefore uses a one-year planning horizon for capital-equipment purchases. The key tool employed in purchase decisions is a fab capacity and simulation model created using Wright Williams & Kelly’s...
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