| Summary |
Student: Mei-Yu Chen, 2005.12
Institute of Traffic and Transportation National Chiao Tung University
The make-to-order production model is widely adopted by the TFT-LCD manufacturers. Although the preliminarily estimated number of orders can be obtained one month earlier than the delivery date, TFT-LCD manufacturers require the precise number of orders, which in most cases could not be reached until 7 days prior to delivery, to arrange production and transportation activities to meet the demand of the customers. The main drawback of this current practice for TFT-LCD manufactures is that insufficiencies of lead time to plan production and transportation have caused inefficiency in logistics performance, i.e. inadequate inventory or higher transportation costs.
This study attempts to solve the aforementioned problems by employing an integer mathematical programming model to better schedule production and transportation activities on the basis of the estimated number of orders, coupled with a rolling-over approach to tackle the problem that in reality customers submit their finally determined orders in a short lead time.
Utilizing the investigated information from one large TFT-LCD manufacturer in Taiwan as the input data for parameters and TFT-LCD demand patterns of the model, and employing LINGO 8.0 as the solving software for the model, a number of empirical studies based on four scenarios have been performed. The results showed that the total costs (including production and transportation) were minimized by delivering 70-90% of TFT-LCDs by sea and the rest by air, rather than entirely by sea. In respect of TFT-LCDs transported by sea during low ordering season, the products were firstly offered to the destinations where the frequency of voyages was lower, secondly assigned to those where the difference of costs between air transportation and sea transportation (thereafter transportation cost difference) was greater, and finally provided to the locations where more frequent voyages and flights were available and where transportation cost difference was lesser. However, during peak season, the first priority was to provide products to those locations where transportation cost difference was greater, and the next to deliver products to destinations where voyages were fewer. The same results could be obtained in situations where the final order number was relatively greater than that of the preliminary estimation, with a need for TFT-LCD manufactures to reserve a higher level of inventory and to transport more products by sea to destinations where transportation cost difference was greater. |
