An analytical closed-form solution for multiple line supplier selection problem

Abstract Supplier selection is an essential issue, particularly, for semiconductor manufacturing. Nowadays, since high demands in the globally competitive semiconductor manufacturing environment, multiple-line processes are quite commonly applied. In the paper, we consider a two-stage method composing of quality verification and selection decision for multiple-line supplier selection problems. Since quality performance is an important criterion in supplier selection, we test whether the new supplier has a significantly better capability than the existing supplier based on the multiple-line yield index in the stage of quality verification. In selection decision, when the magnitude of capability outperformance is significant, switching contracts to a new entrant supplier is suggested. In addition, analytical closed-form solutions for asymptotical critical values and required sample sizes are derived and tabulated for the investigated multiple-line supplier selection problem. We demonstrate the applicability of the proposed supplier selection method by presenting a real-world example taken from a semiconductor packaging shop floor located in the Science-based Industrial Park in Hsinchu, Taiwan.