Price Forecasting And Ordering Strategy For Steel In Construction Projects

The control of cost of materials is an important part for construction projects to acquire benefits,while the ordering cost of steel occupies a large proportion of the cost of construction materials.By analyzing the present situation of construction companies’ operation and steel ordering,we find that the construction industry size is huge but its profit rate is not very high in China.In order to raise revenues and boost profits for construction companies,it would be better for construction developers or building contractors to make the proper steel ordering strategy so that they can control the cost.Through making the proper strategy,we can meet the needs of the construction,reduce downtime losses,reduce inventory costs and capital occupation,and improve the profitability of the entire construction industry as well.Steel prices are affected by various factors,and market prices of steels are always fluctuating.In order to provide help for the steel ordering decision-making,according to historical price data of steel,the article processed the sample data on outlier,tendency,conditional heteroscedasticity and seasonal adjustment of the time-series data,then the paper established a proper prediction model of steel price to obtain predicted steel prices in the future.Meanwhile,the paper also established a ordering and storage steel model which was multi-period and dynamic.In order to illustrate the validity of the proposed model,the paper applied the predicted and optimal model to steel ordering which belonged to one construction project of Hengda in Beijing.Through price prediction and ordering optimal for steel,the example was presented to illustrate the validity of the proposed model in this paper.Besides,compared to economic order quantity strategy,minimum inventory policy,mixed strategy and the monthly ordering plan,it turned out the dynamic ordering strategy was the best,and it saved 3.86% of the total cost compared with the monthly ordering plan whose total cost was the highest.Therefore,through establishing the predicted price and ordering model of steel,this paper could provide suggestion for the ordering strategy of steel in construction project.