Comparing the value of information sharing under different inventory policies in construction supply chain

Abstract

Measuring the value of information sharing (VIS) in different inventory policies can help general contractor to improve materials and equipments management in construction supply chain. The models for measuring the VIS under (s, S) and Periodic Review (PR) inventory policies are established. A method to compare the VIS is given in a two-level construction supply chain, which aims to measure the impacts of supply quantity information of materials on general contractor's service level and total inventory cost under different inventory policies. A numerical example is proposed to explore the gap of VIS between (s, S) and PR inventory policies in a rebar supply chain. The results show that general contractor's service level in (s, S) inventory is higher than PR's and total inventory cost in (s, S) inventory is lower than PR's in the case of no information sharing. In the case of information sharing, general contractor's service level in PR inventory policy is higher than (s, S) policy; however, it is implemented by the increase of total inventory cost. This research provides valuable information to help general contractor to make correct decision on inventory management in supply chain at firm-level.