Weighted least-square estimation of demand product mix and its applications to semiconductor demand

Estimation of demand product mix is important for effective production plans. Unlike most research in the literature where the product mix is either given or treated as a decision variable in optimization of the production efficiency, this paper focuses on the product mix itself and how to estimate it from the market demand. With more accurate information on the demand product mix, aggregate production plans for product families can be disaggregated into quality detailed plans for individual product items. In this paper, least-square estimates of demand product-mix proportions are first derived. To take into account the effect of the product life cycle, dynamic weighting schemes are then developed to improve the accuracy of the product-mix estimates. For applications, we concentrate particularly on semiconductor demand where new generations of semiconductor products emerge at the pace of every six months, as manifested by the celebrated Moore's laws. The proposed methodologies will be tested with simulated DRAM demands and actual semiconductor demands of different technology generations.