A criterion of production model selection for building material with delivery delay

Abstract

In the construction industry, delivery times of building materials are often delayed to fit the progress of construction, and therefore parts manufacturers are forced to hold extra parts inventory over the period of the delivery delay. To minimise the inventories, two production models, i.e., push and pull type production models can be widely considered. When production lead-time is short and length of delivery delay is long, a pull type may require smaller inventories to keep a certain service level, and a push type may require smaller inventories under the condition of longer production lead-time and shorter length of delivery delay. To examine performance of average inventory level under different system conditions, factors such as ratio of average length of delivery delay to production lead-time, length of production cycle, and coefficient of variation of demand are chosen to define different system conditions. As the performance measure, the ratio of push type inventory to pull type inventory is used in the comparison of the push and pull types, and a quantitative criterion of production model selection is presented.