Rolling horizon planning with engineering activities in semiconductor supply chains

Process improvement activities by engineering lots are crucial to stay competitive in the semiconductor market. Production and engineering lots compete for the same equipment. We discuss two production planning formulations for a simplified semiconductor supply chain. The first formulation assumes reduced available capacity for production, while the second one directly incorporates engineering activities. Additional capacity is considered in this formulation because of learning effects that represent process improvements. The integrated formulation outperforms the conventional formulation in a rolling horizon setting with respect to profit.