Title: A study on the strategy of capacity planning for a TFT-LCD manufacturer by data envelopment analysis

Authors: Xin Xun Huang, Hongyu Li

Addresses: School of Management, Fudan University, Shanghai 200433, China; Manufacturing Department, AU Optronics (Suzhou) Corporation, Suzhou 201613, China. ' School of Management, Fudan University, Shanghai 200433, China

Abstract: The research was focused on strategic capacity planning for the liquid crystal display (LCD) module plants under one of the three largest TFT-LCD manufacturers in the world. The results of performance evaluation by data envelopment analysis (DEA) model and cluster analysis indicated the direction for performance improvement. An appropriate DEA model was chosen to meet the research needs. Production efficiency, manufacturing technology and operations location were found to be the three impact factors that contributed to the total performance disparity. According to the results of returns to scale for different decision-making units obtained by DEA software, current production scale and operations location, some strategic insight into intermediate-term capacity planning was provided to assist the decision making for possible future adjustment in production capacity of the TFT-LCD manufacturer.

Keywords: DEA; data envelopment analysis; performance evaluation; returns to scale; TFT-LCD manufacturing; revenue management; capacity planning; liquid crystal displays; cluster analysis; production scale; operations location; production capacity.

DOI: 10.1504/IJRM.2009.027604

International Journal of Revenue Management, 2009 Vol.3 No.4, pp.354 - 370

Published online: 03 Aug 2009 *

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