Sawtimber Valuation and Sawlog Allocation Through Simulation of Temple-Inland Sawmills

Francis G. Wagner, James A. Brody, Douglas S. Ladd and Joe S. Beard
Additional contact information
Francis G. Wagner: Forest Products Department, College of Forestry, Wildlife, and Range Sciences, University of Idaho, Moscow, Idaho 83844-1132
James A. Brody: Temple-Inland Forest Products Building Products Division Diboll, Texas 76941
Douglas S. Ladd: Decision Consultants, Inc., 5511 Capitol Center Drive, Suite P130, Raleigh, North Carolina 27606
Joe S. Beard: Temple-Inland Forest Products, Building Products Division, Diboll, Texas 76941

Interfaces, 1996, vol. 26, issue 6, 3-8

Abstract: The cost of delivered sawlogs to a sawmill may account for 70 to 80 percent of all operating costs. Therefore, accurate valuation of standing sawtimber and proper allocation of sawlogs are critical to a sawmill's long-term profitability. Sawmills differ, including the four southern-pine sawmills operated by Temple-Inland Forest Products in east Texas and southwest Louisiana. As a result, one sawmill may process a certain group of sawlogs more efficiently and obtain a higher value from those sawlogs than another group. To determine sawtimber value and to allocate sawlogs to sawmills, Temple-Inland Forest Products has employed a simulation program (Micro-MSUSP) since 1991. During 1994, Temple-Inland Forest Products sawmills processed sawtimber worth $154 million, and analysis showed an approximate 3.3 percent ($5 million) improvement in profit margin through improved valuation of sawtimber and better allocation of sawlogs. Temple-Inland's investment in simulation has amounted to two full-time employees and approximately $95,000 each year.

Keywords: industries: lumber/wood; simulation: applications (search for similar items in EconPapers)
Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/inte.26.6.3 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:26:y:1996:i:6:p:3-8

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().