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

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.