A replenishment model for VMI warehouse of LED-CM plants

Abstract

Purpose-The LED Chip Manufacturing (LED-CM) is an important process in the LED supply chain. Due to customer pressure or to providing better services in order to enhance competitiveness, the Vendor Managed Inventory (VMI) strategy is applied in LED-CM plant in recent years. The chips in the VMI warehouse of the customers must meet the specifications of the customer requirements. Basically, Chips of a specification of the customer requirements compose of the chips of different bins. A bin is defined by the definite electrical functions of LED chips. Deciding how many chips of each feasible bin must be allocated to a replenishment order (RO) affects the performance of VMI in LED-CM plant. Methodology-A model of allocating chips from bins to ROs for LED-CM plants is proposed in this paper. Three objectives, i.e., maximizing ROs of delivery, maximizing throughput of delivery and maximizing the total left chips of the feasible bins of potential ROs, are considered in the proposed model to obtain the best result. Findings-The obtained ROs of delivery or throughput of delivery could serve as a valuable informance for LED-CM plants. Conclusion-Results show that employing the proposed methodology can facilitate LED-CM plants to implement the VMI service effectively.