Optimization of inventory costs management in the construction enterprise

Abstract

Abstract During planning the execution of each construction project, the factors that may affect the effectiveness of its realization should be analyzed in detail. The costs of execution construction projects are significantly influenced by (apart from technical factors) decisions in the field of inventory management, among others, variability of environmental conditions, prices of construction products, the ability to acquire local suppliers, distance of transport, limited size of storage for construction products as well as the individual character of the project. In projects related to the buildings erection and other construction works, there are many logistical tasks in the area of supply in construction products, raw materials, equipment, as well as in the area of financial and information flow. Taking into account the large share of material costs, inventory management in the costs of projects realization and the high potential for their reduction, every enterprise operating in the construction industry should pay a great importance to the supply logistics sector. Determination of the size and delivery times of construction products, as well as the transport routes, storage and reloading locations are decision-making problems that are solved by management of both the enterprise and the construction projects. The paper presents a proposal for a methodology, which allows to determination and comparison of the inventory management costs in enterprise conducting parallel works on several construction sites. Mathematical models have been developed which simulate the functioning of supply logistics systems and allow, through their solution, to determination of the minimum logistics costs with optimal arrangements for the supply schedule (delivery volumes in subsequent periods of the project execution). This is the foundation for the selection of the optimal variant of a supply chain management. The practical application of the methodology proposed is illustrated using an example.