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...een looked at as a major cost and source of uncertainty due to the volatility within the commodity market and demand for the value-added product. Inventory is held by manufacturing companies for a number of reasons, such as to allow for flexible production schedules and to take advantage of economies of scale when ordering stock (Nahmias, 2004). The efficient management of inventory systems is therefore a crucial element in the operation of any production or manufacturing company (Chase et al., 2006). Classification of inventory is a crucial element in the operation of any production company (Björnfot and Torjussen, 2012). Because of the huge number of inventory items in many companies, great attention is directed to inventory classification into the different classes, which consequently require the application of different management tools and policies. ABC inventory management deals with classification of the items in an inventory in decreasing order of annual dollar volume. The ABC classification process is an analysis of a range of items, such as finished products or customers into three categories: A- outstandingly important; B- of average importance; C- relatively unimportant as a basis for a control sch...

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...imarily depending on experience (Blakemore and Konda 2010). This unsystematic manner in which plans are made depends on the subjective recognition that material requirements cannot be appropriately targeted for production (Vollmann et al. 2004, Arbulu et al. 2005). Material supply has become one of the key issues to enhance company competitiveness (Ulubeylia 2010, O’Brien et al. 2002). Previous researches have proven material sharing to be a promising way to provide fabricators with a flexible material supply, especially for industries that manufacture with special materials (Lee et al. 2007, Björnfot and Torjussen 2012). However, the transshipment models developed by the current studies ignored transshipment lead time and transportation costs, which is inappropriate for an 1 Associate Professor, Department of Civil Engineering, National Pingtung University of Science and Technology, 1, Shuefu Rd., Neipu, Pingtung 912, Taiwan, phone: +886-8-7703202, fax: +886-8-7740122, e-mail: ko@mail.npust.edu.tw; Research Director, Lean Construction InstituteTaiwan; Executive Director, Lean Construction Institute-Asia Ko Proceedings of the 20th Annual Conference of the International Group for Lean Construction industry wit...