Reducing construction material cost by optimizing buy-in decision that accounts the flexibility of non-critical activities
Engineering, Construction and Architectural Management
ISSN: 0969-9988
Article publication date: 16 August 2018
Issue publication date: 20 September 2018
Abstract
Purpose
The goal of making buy-in decisions is to purchase materials at the right time with the required quantity and a minimum material cost (MC). To help achieve this goal, the purpose of this paper is to find a way of optimizing the buy-in decision with the consideration of flexible starting date of non-critical activities which makes daily demand adjustable.
Design/methodology/approach
First, a specific algorithm is developed to calculate a series of demand combinations modeling daily material demand for all the possible start dates. Second, future material prices are predicted by applying artificial neural network. Third, the demand combinations and predicted prices are used to generate an optimal buy-in decision.
Findings
By comparing MC in situation when non-critical activities always start at the earliest date to that in situations when the starting date is flexible, it is found that making material buy-in decision with the consideration of the flexibility usually helps reduce MC.
Originality/value
In this paper, a material buy-in decision-making method that accounts non-critical activities’ flexible starting date is proposed. A ternary cycle algorithm is developed to calculate demand combinations. The results that making material buy-in decision considering non-critical activities’ flexible starting date can reduce MC in most times indicates that contractors may consider non-critical activities’ flexibility a part of the buy-in decision-making process, so as to achieve an MC decrease and profit increase.
Keywords
Citation
Meng, J., Yan, J., Xue, B., Fu, J. and He, N. (2018), "Reducing construction material cost by optimizing buy-in decision that accounts the flexibility of non-critical activities", Engineering, Construction and Architectural Management, Vol. 25 No. 8, pp. 1092-1108. https://doi.org/10.1108/ECAM-12-2016-0263
Publisher
:Emerald Publishing Limited
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