IDENTIFICATION OF THE ECONOMICALLY EFFICIENT SOURCES OF WOOD FOR A LARGE PULP-MILL IN ARGENTINA

An economic model of a long run profit maximization from forestry acti vities by a large pulp mill, a price leading oligopsonist, in Argentin a is suggested. An equilibrium outcome of the model is determined by f ormulating the two interactive linear programming models and solving t hem iteratively. The tactical as well as strategic planning issues are incorporated in the model. The results indicate that even when the mi ll's cost of planting is slightly higher than the farmer's cost, the s elf supply of the wood increases with time. In about 30 years time, th e mill may end up producing most of its wood demand and also sell some to other small processing facilities.