Building construction supply chain resilience under supply and demand uncertainties

Abstract

This paper presents a multi-product, multi-period construction supply chain model, accounting for supplier capacity and material demand uncertainties. Robust optimisation is adopted to address model uncertainties. Research questions proposed are focused on: i). back-up sourcing and backordering decisions' sensitivity to associated cost factors, and ii). effects of the supply chain inventory system on the overall cost and risk management. The answers to these questions provide valuable insights for enhancing the resilience of construction supply chains and are informative for general contractors. Firstly, the back-up sourcing decision is the most sensitive to back-up suppliers' unit material price and unit transportation fees. Secondly, back-up sourcing and backordering primarily address the supply-side risk. Lastly, while inventory holding can be costly, it effectively mitigates the financial uncertainties resulting from varying project demand. These findings highlight the need for extensive quantitative modelling research on other resilient strategies in the context of construction supply chains.

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