Balancing inventory and equipment contingencies by a flexible semiconductor supply chain simulation model

A semiconductor supply chain is complex and faces numerous challenges, such as volatile and uncertain demand, globalisation, a rapid changing environment, and long lead times. This results in demand- and supply-side uncertainties. Infineon hedges against these uncertainties by adding inventory and capacity buffers (also called contingencies). In this master thesis, a simulation-based framework to balance inventory and equipment contingencies for Infineon was developed. For this purpose, we provided the existing supply chain simulation model of the department with flexibility and increased its accuracy (maximal deviation of 5% from the real data). With this model, we investigated how to achieve a specific inventory service level at lowest total costs (inventory and capacity), and how this service level and the costs depend on stock levels and utilisation. We used a simplified demand scenario as input for the experiments to be able to understand and quantify the relationships.