Optimal Strategies for Prefabricated Construction Supply Chain in Circular Economy

ABSTRACT

The construction industry is a major consumer of raw materials and generates large amounts of construction and demolition waste, while contributing to economic growth and social development. With public awareness of sustainable development, the construction industry is concerned to adopt the circular economy concept to realize transformation and upgrade, which aims to maximize resource utilization and minimize waste production. In contrast to the traditional linear economy, circular economy creates a closed-loop construction supply chain management with reverse logistics. However, the transition to circular economy introduces new entrants with new technology who contend for the market share with traditional stakeholders, leading to changes in the market structure. This research aims to investigate the competition relationships in prefabricated construction supply chains (PCSCs) and derive optimal decisions for stakeholders from their perspectives. Three scenarios are investigated: (i) The competition between two PSCSs with different service levels; (ii) The competition between two manufacturers with different customer behaviors; and (iii) The competition between two manufacturers with government subsidies and incentive mechanisms.
(166 words