Valuation of yield management investments

The objective of this paper is to develop a novel and effective model for the valuation of yield management system investments. We first present a innovative cost-of-ownership model, in actuality, a benefit of ownership model, to perform the cost benefit analysis of a defect metrology investment project. Compared to the traditional COO methodology, our model correctly incorporates the benefits achieved through yield management systems. We also demonstrate how the discounted cash flow analysis captures the time value of the investment, which is ignored by all COO models. Specific examples on excursion reduction and baseline improvement are provided. Finally, we present a case where the operational model of the tool is applied directly to evaluate the benefit of different yield management strategies.