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Inventory Management in Construction Operations Involving on-site Fabrication of Raw Materials  

Im, Keon-Soon (연세대학교 토목환경공학과 대학원)
Han, Seung-Heon (연세대학교 사회환경시스템공학부)
Jung, Do-Young (대림산업 기술연구소)
Ryu, Chung-Kyu (연세대학교 토목환경공학과 대학원)
Choi, Seok-Jin (연세대학교 토목환경공학과 대학원)
Publication Information
Korean Journal of Construction Engineering and Management / v.9, no.1, 2008 , pp. 187-198 More about this Journal
Abstract
There are usually plenty of material inventories in a construction site. More inventories can meet unexpected demands, and also they may have an economical advantage by avoiding a probable escalation of raw material costs. On the other hand, these inventories also cause negative aspects to increase costs for storing redundant inventory as well as decreasing construction productivity. Therefore, a proper method of deciding an optimal level of material inventories while considering dynamic variations of resources under uncertainty is very crucial for the economical efficiency of construction projects. This research presents a stochastic modelling method for construction operations, particularly targeting a work process involving on-site fabrication of raw materials like iron-rebar process (delivery, cut and assembly, and placement). To develop the model, we apply the concept of factory physics to depict the overall components of a system. Then, an optimal inventory management model is devised to support purchase decisions where users can make timely actions on how much to order and when to buy raw materials. Also, optimal time lag, which minimizes the storage time for pre-assembled materials, is obtained. To verify this method, a real case is applied to elicit an optimal amount of inventory and time lag. It is found that average values as well as variability of inventory level decreased significantly so as to minimize economic costs related to inventory management under uncertain project condition.
Keywords
optimal inventory management; inventory cost; reorder point; optimal time lag;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
연도 인용수 순위
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