Putting a Price Tag on Hot Lots and Expediting in Semiconductor Manufacturing

A common practice in semiconductor manufacturing is to give higher priority to certain “hot lots” to reduce their cycle time and deliver them on time. Despite good performance of these high priority lots, expediting might worsen the overall performance of the fab due to decelerating all other lots. Thus, this paper uses a simulation model of a scaled-down wafer fabrication facility, to put a price-tag on hot lots and expediting measures to derive suggestions for decision makers on (i) how much additional profit per hot lot is required to compensate for increasing cost due to introducing hot lots, and (ii) the allowable maximum expediting cost per period.