Sub-contractor selection and Cash Flow Management by SMEs in the Construction Industry

Xu Ying

Abstract

The construction industry, especially small and medium-sized enterprises (SMEs), faces a variety of financial challenges, exacerbated by the popularity of COVID-19. This study introduces two key tools: the cash flow linear model and the Analytical Hierarchy Process (AHP) model. The cash flow linear model helps to effectively manage cash flow, optimize investments, and reduce financial risks. The AHP model helps to select reliable subcontractors. These models provide a comprehensive solution to the complex financial requirements of construction projects. Through real-world case studies, we demonstrate how these models can enhance financial stability, improve subcontractor selection, and reduce risk, ultimately improving the competitiveness of SMEs in the industry. This study emphasizes the importance of timely payments, strategic investments, and supply chain resilience and suggests possibilities for further development in the construction industry.