| We identify two crucial characteristics of the semiconductor supply chain as follows: (1) demand and manufacturing capacity are both main sources of uncertainty, and (2) coordination must consider two distinct viewpoints: a product perspective concerning marketing and strategic demand management, and a process standpoint involving manufacturing, yield, and technology configuration.; In Chapter 2, we describe the long term planning problem using a multi-stage stochastic program with recourse where demand and capacity uncertainties are incorporated via a scenario structure. To reconcile the marketing and manufacturing perspectives to the problem, we consider a decomposition of the planning problem resembling decentralized decision-making involving the headquarters, the marketing manager, and the manufacturing manager. To study various trade-offs under this decentralized structure, we develop recourse approximation schemes simulating different decentralization strategies. These schemes vary in information requirements and complexity, while providing insight on the value of information in this environment.; In Chapter 3, we develop another stochastic programming model that implements decentralization for short-term planning. We establish the cost of this decentralization by comparing it against a centralized model, which maximizes the firm's overall expected profit. We develop two mechanisms that coordinate the solution to the decentralized model using different degrees of information exchange. These mechanisms are based on the Augmented Lagrangian approach and are derived from the Auxiliary Problem Principle.; In Chapter 4, we analyze the short-term capacity allocation problem in a game theoretical setting. We design a capacity allocation mechanism that extracts privately observed demand information from the product managers. The proposed mechanism also implements the optimal allocation that maximizes system wide total expected profits. This mechanism is supported by an incentive scheme that requires side payments and participation charges to the players. We find the conditions under which the surplus created by coordination exceeds the bonus payments; hence, the mechanism achieves budget balance and voluntary participation simultaneously. |
