Abstract
Quantifying the benefits of construction supply chain management through prescriptive models is a challenging and fast-growing research area that still lacks standardized optimization models with full integrative potential. In response to the needs and the peculiarities of the construction industry, this paper proposes an innovative model that merges temporal and project-based supply chains into a sustainable network with repetitive flows, large scope contracts, strategic alliances and economies of scale. It is a dynamic mixed-integer linear programming model for cost minimization of a three-echelon supply chain serving multiple sites with multiple products over a time horizon. Its novelty lies in yielding optimal decisions on network design, product quantities to be purchased and transported, shipments and inventory levels in all echelons under any logistics system in a multi-period, multi-product and multi-project environment with discount schemes and strategic preferences. The model is general enough to be implemented by any general contractor acting as a system integrator but also allows customization with logical constraints. All these features constitute an innovative, versatile and flexible managerial decision making tool. Model implementation is based on a spreadsheet optimization software and is followed by post-solution analysis, sensitivity analysis and multiple parameterized optimizations.
Highlights
The construction industry constitutes an important sector of the economy with great contribution to the national socio-economic development of countries
It seems that many researchers examine a supply chain pertaining to an individual construction project or an individual product and study individual relationships within the supply chain, which leads to a simplified approach of Supply Chain Management (SCM) and neglects the complex interdependencies within construction
We develop a mathematical programming model based on a typical CSC structure that is suitable for multiple construction projects managed on a continuing basis by a construction company/general contractor empowered to act as a system integrator
Summary
The construction industry constitutes an important sector of the economy with great contribution to the national socio-economic development of countries. Versatile and flexible managerial decision making tool to the general contractor who has the appropriate leverage power to act as a system integrator and manage dynamically a supply network of suppliers, subcontractors and logistics centers with multiple material flows converging to multiple sites It provides artificial feedback cycles for a wide range of assumptions, enabling the decision maker to identify the most significant inputs and to negotiate with supply chain partners based on information that was not previously quantifiable. Following this introductory section, there are five sections addressing (a) the literature review on CSC optimization models, (b) the development of the proposed model, (c) the computational experience of implementing the model, (d) concluding remarks and (e) future research directions, as well as three appendices
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