Inventory policy for postponement strategy in the semiconductor industry with a die bank

We propose inventory models that can be directly applied to the industrial field by adapting from the order-up-to policy and investigate how a die bank can be used to reduce inventory of finished goods and to improve customer responsiveness. This study was motivated by the cooperation with one leading semiconductor company in Korea that wishes to develop inventory-management policy for a die bank, a facility in which the intermediate and generic forms of fabricated wafers are stored. Our simulation experiments, implemented with Arena (R) software, show that a die bank makes the supply chain more responsive in adjusting demand changes by postponing the differentiation point of finished goods in the production process. We have sufficiently demonstrated the need for a die bank to the company through pilot tests, and laid a good foundation for the introduction of a die bank.

Automated summary

This study proposes inventory models for the industrial field and investigates the use of a die bank to reduce finished goods inventory and improve customer responsiveness.