Abstract
The conventional economic order quantity (EOQ) model used for calculating re-order point in construction material procurement cycle is fundamentally limited by the assumed constant lead time. In real construction scenario, the lead time is hardly ever constant. This study uses a PERT-based simulation model to calculate optimum re-order point and order size with an objective of minimizing the average inventory level and downtime due to non-availability of material. The simulation is run on the STROBOSCOPE simulation framework developed by the researchers at the University of Michigan. The duration data collected from a construction project are used to model each step of the procurement process. The results from the simulation are analyzed to study the relationships between order size, re-order point, average inventory level and work–idle time. A decision-making framework is proposed to choose the optimum order size and re-order point (minimum inventory threshold) for efficient use of storage space and minimum idling.
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