Towards Operational Hedging for Logistics Uncertainty Management in Prefabrication Construction

Abstract

Current years, prefabrication construction has been widely used in the building industry, from which large number of uncertainties exist and may greatly influence the quality and efficiency. This paper proposes a vision of operational hedging to address these uncertainties. Main focus is placed upon prefab factory, prefab logistics, and on-site assembly which are three key phases in a prefabrication project. Several hedging strategies such as lead-time hedging, space hedging, and L+S hedging are introduced. A demonstrative case from Hong Kong Housing Authority is presented for explaining how these strategies are used for different decision makers to cooperate so as to improve the quality and efficiency of operational executions. This paper opens an area in where hedging methodologies, models, solution algorithms, as well as practical cases could be further studied in other area.