Research On JIT Purchasing And Contract Coordination In Prefabricated Construction Supply Chain

The prefabricated construction with the construction mode of “factory-produced,on-site assembly” can effectively shorten the construction period,save resources,reduce carbon emissions and construction waste,and thus has become an important driver for the transformation and upgrading of China’s construction industry.However,prefabricated construction is still in the early stages of development in China,and early or late delivery of prefabs in the prefabricated construction supply chain(PCSC)imposes heavy double handling costs on the project contractor,preventing successful delivery of prefabricated construction projects within budgeted time and cost.The just-in-time(JIT)purchasing strategy requires prefabricated factory to deliver prefabs according to the assembly schedule on sites,which has the potential to minimize double handling costs,but also increases the pressure on prefabricated factory to hold excessive inventory or compress production time.As a result,the prefabricated factory is reluctant to cooperate with JIT purchasing.Hence,clarifying the effect of JIT purchasing on hedging double handling costs and designing the coordination mechanism to promote the application of JIT purchasing in the PCSC,can help reduce the costs of prefabricated construction projects,improve the operational efficiency of the PCSC,and accelerate the promotion of prefabricated construction in China.The main research work and findings are as follows:Research work:(1)The characteristics and advantages of JIT purchasing are explained through theoretical research,based on which,mathematical models are established to compare the total profit of the PCSC under the traditional purchasing mode and the JIT purchasing mode.(2)A delivery time-dependent subsidy contract is introduced,and employing Stackelberg,both parties’ optimal decisions are explored;a constant cost sharing contract is designed to derive the range of achieving Pareto optimization.(3)A combination contract of delivery time dependent subsidy and constant transfer cost term is designed to determine the specific value that achieves a win-win situation,and thus reduces the non-value added waste in bargaining.Adopting Stackelberg game,the optimal solutions for both parties are found;and the unique value that achieves win-win coordination is calculated by Nash arbitration scheme.(4)Based on the sensitivity analysis,numerical studies are conducted to analyze the impact of main parameters of the model on the profits of the PCSC as well as each party.On this basis,important managerial implications are summarized that can provide reference for the contractor and the prefabricated factory to optimize the projects’ cost and improve their own profit in the industrial practice.The research results show that:(1)The JIT purchasing strategy can effectively hedge total double handling costs,and thus yields higher total profit for the PCSC.(2)The delivery time-dependent subsidy contract can incentivize the prefabricated factory to shift purchasing mode to JIT;meanwhile,the constant cost sharing contract can achieve win-win coordination and ensure the smooth operation of JIT purchasing in the PCSC.(3)The combined contract of the delivery time-dependent subsidy and the constant transfer cost term can fairly distribute the system surplus,and achieve win-win coordination.Based on “clarifying the effect of hedging,designing coordination mechanisms and analyzing the impact of model parameters”,this study provides a complete solution to hedge the costs of double handling and strengthen the cooperation of enterprises in the PCSC,which helps to further improve the operational efficiency of the PCSC and accelerate the promotion and application of prefabricated construction in China.