Supply chain model for the semiconductor industry in consideration of manufacturing characteristics

The semiconductor industry has a supply chain network that is distributed all over the world, and its manufacturing process has the particular characteristics that should be considered in supply chain modelling. In this paper we suggest an integrated mathematical model for the semiconductor industry supply chain consisting of production and distribution chains, where manufacturing re-entrancy, binning and substitution are considered. To achieve our objective, three policies for the production chain and two policies for the distribution chain with mathematical formulations are suggested. Six combination policies are tested for the evaluation of performances with an example motivated by a major semiconductor manufacturer in Eechon, South Korea. It is shown that the balance policy for the production chain and the pull policy for the distribution outperform other policies.