SAWTIMBER VALUATION AND SAWLOG ALLOCATION THROUGH SIMULATION OF TEMPLE-INLAND SAWMILLS

Citation
Fg. Wagner et al., SAWTIMBER VALUATION AND SAWLOG ALLOCATION THROUGH SIMULATION OF TEMPLE-INLAND SAWMILLS, Interfaces, 26(6), 1996, pp. 3-8
Citations number
23
Categorie Soggetti
Management,"Operatione Research & Management Science","Operatione Research & Management Science
Journal title
ISSN journal
00922102
Volume
26
Issue
6
Year of publication
1996
Pages
3 - 8
Database
ISI
SICI code
0092-2102(1996)26:6<3:SVASAT>2.0.ZU;2-N
Abstract
The cost of delivered sawlogs to a sawmill may account for 70 to 80 pe rcent of all operating costs. Therefore, accurate valuation of standin g sawtimber and proper allocation of sawlogs are critical to a sawmill 's long-term profitability. Sawmills differ, including the four southe rn-pine sawmills operated by Temple-Inland Forest Products in east Tex as and southwest Louisiana. As a result, one sawmill may process a cer tain 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 employ ed 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) improvem ent in profit margin through improved valuation of sawtimber and bette r allocation of sawlogs. Temple-Inland's investment in simulation has amounted to two full-time employees and approximately $95,000 each yea r.