The subcontractor is responsible for hiring and payroll of constructin workers and providing their own equipment. This helps he builder avoid large capital expenditures for construction equipment and keeps labor costs at a minimum. Monitoring home inventory is one of the most important aspects for home builders. Housing inventory refers to the number of homes built on lots but not sold. High housing inventory ties up working capital that could be used for other purposes.
Home builders risk large expenses if they have large inventories when the housing market slows down.
Most home builders try to minimize this fact by selling homes before they are actually built. Raw Materials Management .