Global Journal of Management and Business Research, F: Real Estate, Event and Tourism Management, Volume 23 Issue 3

V. I nventory M anagement T ools P ractices in C onstruction P rojects in B angladesh Inventory management tools are the techniques by which inventory is measured and regulated according to predetermined norms. In a construction project, 60%-70% cost is the materials cost of the total cost of the project. Inventory Management Tools help to ensure an adequate supply of materials, minimize inventory cost, facilitate purchasing economies, eliminate duplication in order, better utilization of available stocks, provide a check against the loss of materials, facilitate cost accounting activities, enable management in cost comparison, locates & dispose of inactive & obsolete store items, consistent and reliable basis for financial statements. So, it is very important to implement the tools of inventory management. Here, we discuss the inventory control tools which may be implemented in construction projects and show the statistics of the practice of those tools in different construction projects. a) ABC Analysis (Always Better Control) ABC Analysis is an inventory management technique that classifies the materials on the basis of annual usage of materials and that determines the value of inventory items based on their importance to the business. A items represent 10% of the total inventory with 70% of the total annual value. B items represent 20% of the total inventory with 20% of the total annual value. C items represent 70% of the total inventory with 10% of the total annual value. Now I will show the ABC analysis practices in construction projects in Bangladesh through a graph where I consider five mega construction projects (RNPP, DMRP, GWTP, DCRP, MUSCCFPP) in Bangladesh. Fig. 12: ABC Analysis Practices From the questionnaire survey in those five projects, we found that all projects have no practices of this tool. In the case of construction projects most important issue is to finish each milestone according to the schedule and the client’s required date. And many times, due to the lack of fewer used materials and low- price materials a milestone handover may be stopped. So, this tool may not be used in inventory management in construction projects. b) Economic Order Quantity Models (EOQ Model) Economic Order Quantity (EOQ) is a technique used in inventory management that refers to the optimal amount of inventory a company should purchase in order to meet its demand while minimizing its holding and storage costs. EOQ Model helps to prevent stock out, reduce holding cost and storage costs, and run the supply chain smoothly in the construction project. So, it may be implemented in construction materials management. To implement the EOQ model, we have to know the holding cost and storage costs, material costs, lot size, and cycle inventory clearly. i. Lot Size or Batch Size(Q) The quantity that a supply chain stage either produces or orders at a given time. Lot Size=Q Cycle inventory is average inventory that builds up in the supply chain because a supply chain stage either produces or purchases in lots that are larger than those demanded by the customer. Q = Lot size of an order D = Demand per unit of time Cycle Inventory, (CI) = Q/2 Average Flow Time = Q/(2D) Inventory Management Practices and Challenges in Mega Construction Projects in Bangladesh Global Journal of Management and Business Research ( F ) XXIII Issue III Version I Year 2023 31 © 2023 Global Journals ii. Cycle Inventory