Optimization Models for Production Planning in LG Display

This paper introduces an application for production planning based on multiple linear programming models for a light-emitting diode (LED) array assembly. The proposed method, multirank mixing (MRM) optimization, focuses on reducing the inventory level of the LED parts used for various electronic devices, while also meeting customer demands. In this industry, high inventory levels result in high scrap rates for LED parts because product models change frequently. Therefore, maintaining low inventory levels is critical. MRM optimization determines the best combination of LED parts for each assembly step, given inventory levels of LED parts with varying quality characteristics. The results of our performance testing show that our proposed method outperforms a heuristic method that requires intensive effort by human planners. When LG Display used MRM optimization at one of its LED manufacturing facilities, the scrap rate for LED packages decreased substantially.