Prefabrication decisions of the construction supply chain under government subsidies

Prefabrication has been generating increasing interest as a cleaner production strategy to promote sustainable development. Alongside this trend, various subsidies have been set to improve prefabrication levels. This paper evaluates the prefabrication levels of buildings through the assembly rate. A series of models are established to investigate the optimal assembly rate under various government subsidies. The optimal assembly rate and subsidy revenue-sharing coefficient are analyzed in both decentralized and centralized scenarios. By comparing the optimal decisions in these two scenarios, a transfer payment contract is proposed that enables the overall coordination of the prefabricated construction supply chain (PCSC). The results show that the optimal assembly rate in the centralized scenario is higher than that in the decentralized one. When the revenue-sharing coefficient is 100%, the subsidy revenue-sharing contract can coordinate the PCSC system and realize the Pareto improvement. When certain conditions are satisfied in the transfer payment contract, business profits can achieve Pareto optimality. This research provides a reference for construction enterprises making decisions to promote the development of PCSC.