...May 31, 2010 Bunyan Lumber, LLC Bunyan Lumber, LLC has a 7,500-acre forest of Douglas Fir trees that they wish to harvest at the optimal time for profit maximization. The company plans to thin the trees today, which will result in a positive cash flow of $9 million. Thinning the trees allow for optimal growth of the trees until they are ready to be harvested. Our options of when to harvest the trees are 20, 25, 30, and 35 years from today. They are currently 20 years old today, so they will be between 40 and 55 years of age when we plan to harvest. The longer we wait to harvest the trees, the more product we can get from the growth of the trees, and the expected grade of the logs improves over time. Benefits to waiting to harvest the forest are: increased amount of time to grow, increased amount of time to improve the expected timber grade of the trees, and the value of the lumber is expected to increase with the rate of inflation which is estimated to be 3.7%. Disadvantages to waiting to harvest the forest include: costs increase at the rate of inflation, the clear-cut harvest contribution increases 3.2% annually, and most importantly the time value of money. For the following, please refer to the attached spreadsheet, Bunyan Lumber, LLC.xls. • Figures 1 and 2 include information provided from Bunyan Lumber, LLC • Figure 3 shows the amount of MBF per acre per grade. This can be calculated using the information provided in Figure 2. For example...
Words: 878 - Pages: 4
...Assignment #2 (Bunyan Lumber, LLC Project) BUS: 650 Instructor Watson Renee Frempong January 9, 2012 I strongly believe that with the calculations that I have made, Bunyan Lumber should harvest their forest in 25 years and continue to harvest every 45 years. They gain the most profit and increase revenue from harvesting in the 25 years since the forest will be 45 years mature. Here are the figures: Total Number of acres 7500 Inflation rate 3.7% Nominal required return 10% Current logging cost per MBF $160.00 Road construction cost per MBF $60.00 Sales and administrative costs per MBF $21.00 Excavator piling per acre $160.00 Broadcast burning per acre $305.00 Site preparation per acre $155.00 Planting costs per acre $240.00 Conservation contribution today $250,000.00 Conservation contribution growth rate 3.2% The total MBF (thousands of dollars per board feet) is established by multiplying the amount per acre by the total acres at the same time as factoring in the 5% loss of timber due to defects and breakage. According to the textbook, managers use the scenario analysis which is a variant of sensitivity, to minimize this problem. Simply put, this approach examines a number of different likely scenarios, where each scenario involves a confluence of factors (Ross, et, al. 2011). Moreover, scenario allows you to incorporate many different variables at a time while the sensitivity analysis can only incorporate one variable...
Words: 768 - Pages: 4
...BUNYAN LUMBER, LLC Bunyan Lumber, LLC, harvests timber and delivers logs to timber mills for sale. The company was founded 70 years ago by Pete Bunyan. The current CEO is Paula Bunyan, the granddaughter of the founder. The company is currently evaluating a 7,500-acre forest it owns in Oregon. Paula has asked Steve Boles, the company’s finance officer, to evaluate the project. Paula’s concern is when the company should harvest the timber. Lumber is sold by the company for its “pond value.” Pond value is the amount a mill will pay for a log delivered to the mill location. The price paid for logs delivered to a mill is quoted in dollars per thousands of board feet (MBF), and the price depends on the grade of the logs. The forest Bunyan Lumber is evaluating was planted by the company 20 years ago and is made up entirely of Douglas fir trees. The table below shows the current price per MBF for the three grades of timber the company feels will come from the stand: TIMBER GRADE PRICE PER MBF 1P $575 2P $555 3P $530 Steve believes that the pond value of lumber will increase at the inflation rate. The company is planning to thin the forest today, and it expects to realize a positive cash flow of $450 per acre from thinning. The thinning is done to increase the growth rate of the remaining trees, and it is always done 20 years following a planting. The major decision the company faces is when to log the forest. When the company logs the for- est, it will immediately replant...
Words: 331 - Pages: 2
...Alabama Atlantic would like to determine the optimal shipping routes for its lumber and the amount to be shipped on each route, in order to minimize the total equivalent uniform annual cost. It is my understanding that the company has three sources of wood, with annual availabilities of 15, 20, and 15 million board feet respectively. Additionally, the company has 5 markets it sells to, which have annual demands of 11, 12, 9, 10, and 8 million board feet respectively. Because the estimated supply and demand of wood is in equilibrium, it is important to meet the full demand in each market. It is also important that total amount shipped does not exceed the available supply. Alabama Atlantic has two possible methods to ship the wood. They can either ship it by train or by ship. Depending on the specific source and market, it can be less costly to use one method over the other. However, it is important to note that using ships may require a large capital investment. I have had a chance to determine the potential shipping plans for Alabama Atlantic and have analyzed the company’s situation. I was able to solve this as a linear programming problem using Microsoft Excel, however some assumptions had to be made. First, the production costs are assumed to be the same at each source, so that the only relevant costs are for shipping. Second, the cost of shipping is assumed to be constant no matter what quantity is...
Words: 251 - Pages: 2
...The Lumber Room (by H.Munro) The text under analysis is written by an outstanding British novelist and short story writer Hector Munro. Hector Hugh Munro (December 18, 1870 – November 13, 1916), better known by the pen name Saki, was a British writer, whose witty and sometimes macabrestories satirized Edwardian society and culture. He is considered a master of the short story and is often compared to O. Henry and Dorothy Parker. His tales feature delicately drawn characters and finely judged narratives. Saki's world contrasts the effete conventions and hypocrisies of Edwardian England with the ruthless but straightforward life-and-death struggles of nature. Nature generally wins in the end. Owing to the death of his mother and his father's absence abroad he was brought up during his childhood, with his elder brother and sister, by a grandmother and two aunts. It seems probable that their stem and unsympathetic methods account for Munro’s strong dislike of anything that smacks of the conventional and the self-righteous. He satirized things that he hated. Munro was killed on the French front during the first world war. In her Biography of Saki Munro’s sister writes: “One of Munro’s aunts, Augusta, was a woman of ungovernable temper, of fierce likes and dislikes, imperious, a moral coward, possessing no brains worth speaking of, and a primitive disposition.” Naturally the last person who should have been in charge of children. The character of the aunt in The Lumber-Room is Aunt...
Words: 611 - Pages: 3
...Ozark Furniture Company Ashford University MAT 221 “Maple rockers. Ozark Furniture Company can obtain at most 3000 board feet of maple lumber for making its classic and modern maple rocking chairs. A classic maple rocker requires 15 board feet of maple, and a modern rocker requires 12 board feet of maple. Write an inequality that limits the possible number of maple rockers of each type that can be made, and graph the inequality in the first quadrant.” Ozark Furniture Company In this paper we will discuss a linear inequality word problem. We will discuss and determine the regions which are safe and unsafe. From there we will know what lies in the safe region and we will produce an understanding of the safe region to solve the linear inequality. The first step is much like any other step; we must attain a understanding of what we are working with. The text states that “Ozark Furniture Company can obtain at most 3,000 board feet of maple lumber for making its classic and modern maple rocking chairs. A maple classic rocker requires 15 board feet of maple, and a maple modern rocker requires 12 board feet of maple. Write an inequality that limits the possible number of maple rockers of each type that can be made, and graph the inequality in the first quadrant.” With the information from the text we can easily make the maple classic rocking chairs as the variable labeled “x” and the maple modern rocking chairs will be labeled as the variable of “y”. Now we must look to...
Words: 1184 - Pages: 5
...there are some regions that make certain distinctions between the two. In most cases, timber is said to be the wood that is currently erect and is attached firmly to the earth’s ground. This is the term used for a tree that has not yet been processed into lumber. On the contrary, lumber is generally accepted as the wood that is no longer attached to the ground and is often seen as the laid down or processed wood. Secondly, timber is usually the term used for a piece of wood that still has its bark on whereas lumber is usually bark-less in nature. The latter usually undergoes a drying process and has a firm finish to it. Lumber is often prepared with accurate measurements and is almost always ready for use in construction and furniture making. Depending on the country, timber is the common name used for wooden boards. In the U.K. and Australia whereas lumber is the one used for the same kind of product in the U.S. and in most parts of Canada. In this same region (U.S. & Canada), they adopt the term timber for a piece of lumber with a relatively small measurement of no less than five inches or 127 mm. For them, timber is also the non-processed standing wood. Due to its processed or finished nature, it is the word ‘lumber’ that is dominantly used for commercial purposes and sale. For timber to be made commercially available for construction, it is usually necessary for it to undergo finishing first before it is sent to the market. In history, it can also be accounted for...
Words: 301 - Pages: 2
...Stella-Jones Inc. is a North American producer and marketer of industrial treated wood products, specializing in the production of railway ties and timbers as well as wood poles supplied to electric utilities and telecommunications companies. The Company also provides treated residential lumber products and customized services to lumber retailers and wholesalers for outdoor applications. Other treated wood products include marine and foundation pilings, construction timbers, highway guardrail posts and treated wood for bridges. The company has treating and pole peeling facilities across Canada and the United States and sells its products primarily in these two countries. The company operates within one business segment, the production and sale of pressure treated wood and related services but has four different markets which are 1. Railway Ties 2.Utility Poles 3.Industrial Products and 4.Residential Lumber. Railway Tie sales are approximately 55% of total sales of the company. Stella-Jones is one of the largest producers in North America. Canadian railways have for many years made the company the leading vendor of this...
Words: 498 - Pages: 2
...of high grade lumber products from raw logs received in its yard. Its finished lumber products are sold in an international market that is very price competitive. Treetop relies on a central marketing company, which also represents several of its competitive mills, to market its products. Product packaging and presentation is the one important difference in defining the company’s sales in an international competitive market with little differences in product offerings. Internally the company operations are divided into six operational departments, overseen by one general manager, 16 supervisors and support staff along with 180 unionized employees. Shifts are rotated and maintence employees work a night shift so operations are ongoing 24 hours. The company has seen increased productivity in the departments of planning, sawmill and the department levels of productivity in the boom, shipping, and maintenance departments have remained constant. The one area of decreasing productivity is the packaging department. This is important as the presentation and packaging of product produced is what Treetop Forest Products depends on for sales. Treetop’s marketing agency has instituted a monthly packaging quality award with all its clients it represents to increase package quality, which Treetops packaging department has previously won but now have seen decreases in ratings. Some of Treetops largest client buyers have increasingly switched to competitors lumber saying that the...
Words: 1147 - Pages: 5
...The analysis of the text “The Lumber - Room” by H. Munro. The text under analysis is written by an outstanding British novelist and a short – story writer Hector Munro. He was born in 1870 and died in 1916.Also he is better known for his pseudonym Saki. Owing to the death of his mother and his father’s absence abroad he was brought up during his childhood, with his elder brother and sister by a grandmother and two aunts. It seems probable that their stern and unsympathetic methods account for Munro’s strong dislike of anything that smacks of the conventional and the self-righteous. He satirized things that he hated. H. H. Munro is best known for his humorous and very interesting short stories. He often used black humour language in his stories. It is a form of humor that regards human suffering as absurd rather than pitiable, or that considers human existence as ironic and pointless but somehow comic. He used it in order to deride the human vices and to show inefficiency of actions of moralistic, hypocritical persons. Munro was killed on the French front during the First World War. His sister in her Biography of Saki writes: “One of Munro’s aunts, Augusta, was a woman of ungovernable temper, of fierce likes and dislikes, imperious, and moral coward, possessing no brains worth speaking of, and a primitive disposition.” Naturally the last person who should have been in charge of children. The character of the aunt in the Lumber – Room is Aunt Augusta to the life. The text tells...
Words: 2123 - Pages: 9
...The first step is much like any other step; we must attain a understanding of what we are working with. The text states that “Ozark Furniture Company can obtain at most 3,000 board feet of maple lumber for making its classic and modern maple rocking chairs. A maple classic rocker requires 15 board feet of maple, and a maple modern rocker requires 12 board feet of maple. Write an inequality that limits the possible number of maple rockers of each type that can be made, and graph the inequality in the first quadrant.” With the information from the text we can easily make the maple classic rocking chairs as the variable labeled “x” and the maple modern rocking chairs will be labeled as the variable of “y”. Now we must look to see how many materials are needed for each of the builds. It appears that the classic chair requires 15 feet of maple wood so we will use “15x” as the first term of the inequality. Now to look at the modern rocker, this chair requires 12 feet of maple wood. So much like the classic term we will use “12y”. The company is able to use 3,000 feet of board to create chairs so we will use the inequality of 15x + 12y ≤ 3000 where ≤ means using all of the boards which the company can get. From here we will move 15x to the right side the equation using subtraction on both sides which will create 12y ≤ 3000 – 15y. We will not divide the equation by 12 on both sides and simplify which will create y ≤ 250 – (5/4)x. Now we must find the x-intercept. Using y ≤ 250...
Words: 964 - Pages: 4
...Ozark Furniture Lori Pope MAT221: Introduction to Algebra Instructor: Kemba Chambers December 2, 2013 Ozark Furniture Ozark furniture has 3000 board feet of maple lumber in stock. In order to make classic maple rockers they need 15 board feet of maple lumber. In order to make a modern rocker they need 12 board feet of maple lumber. So we need to process an inequality and graph it in order to be sure that we have enough of the maple lumber in stock to prepare orders. The first step is to define what variables that I will be using in my inequality. So let’s say c = the number of classic maple rockers and let m= the number of modern rockers. Because each of the classic maple rockers require 15 board feet, I will use 15c, and because each modern rocker requires 12 board feet, I will use 12m. Remember I am limited to the amount of maple lumber which is 3000 board feet. My inequality that I will use will look like this: 15c+12m< 3000. Next, we will call c the independent variable on my horizontal axis and m the dependent variable on the vertical axis. By doing this we can graph the equation using the intercepts. The C-intercept is found when m=0 15c< 3000 c< 200 So what we are saying is that the C-intercept is (200, 0) The M-intercept is found when c=0 12< 3000 m< 250 So what we are saying here is that the M-intercept is (0, 250) I will be using a solid line because of the “less than or equal to” inequality...
Words: 640 - Pages: 3
...sawmill distribution channel challenges and potential research needs in the Swedish sawmill industry with regards to the respective typology. However, further research is needed in order to validate these results. What is original/value of paper: This paper focus on the sawmill industry distribution channels, which is a neglected but important area for sawmill’s competitive advantage. The paper also contributes to research by applying contingency theory and typology as an approach to deal with the variety of sawmills distribution channel challenges. Keywords; Typology, distribution channel challenges, research needs, and Swedish sawmill industry 1. Introduction Softwood lumber is in many cases referred to as a commodity product (Roos et al, 2002) and it is thereby produced in general standard lumber sizes (Hansen et al, 2002). Competition amongst suppliers of commodity products is primarily based on price (Shapiro, 1979) and the focus is efficiency...
Words: 4034 - Pages: 17
...variable to each type of rocker that the Ozark Furniture Company makes, write a linear inequality which incorporates the given information of the total board feet and feet required for each type of rocker they make, and draw a graph on paper of the inequality to aid in the writing of the paper. Problem number 46 on page 240 of Elementary and Intermediate Algebra is as follows: “The Ozark Furniture Company can obtain at most 3000 board feet of maple lumber for making its classic and modern maple rocking chairs. A classic maple rocker requires 15 board feet of maple, and a modern rocker requires 12 feet of maple. Write an inequality that limits the possible number of maple rockers of each type that can be made, and graph the inequality in the first quadrant”(Dugopolski,2012). c=classic maple rocker m= modern maple rocker The classic maple rocker, or c, requires 15 board feet of maple so I will use 15c to illustrate. The modern maple rocker, or m, requires 12 board feet of maple so I will illustrate with 12m. The total number of lumber required or obtained to complete both of the modern and classic rockers totals 3000 board feet of maple. The inequality shown: 15c+12m≤3000 In order to graph the equation I will use the following intercepts. The horizontal intercept I will incorporate the variable independent c (representing classic maple rocker,) and for the vertical intercept I will use dependent variable m (representing the modern classic maple rocker.) Next I will find...
Words: 622 - Pages: 3
...Companies There's a story making the rounds about a consultant who was called into a lumber company. Profits were slipping and management couldn't figure out what was causing it. All of the other performance measures were stable or increasing. The consultant did what consultants do, talking with a large number of employees. He observed several things about this particular lumber company, including the fact that working conditions were somewhat austere and that the dominant leadership style was autocratic, almost to the point of being abusive. In one of his many conversations, the consultant asked an employee how it was that, given the difficult working conditions and harsh leadership style, there wasn't more absenteeism, poor production or any of the other typical symptoms of an organization that was "hard" on its workers. The employee answered, "Oh that's easy. When we get frustrated, or angry we just feed the hog." Seeing the puzzled look on the consultant's face the employee explained. The "hog" was the big mechanical wood chipper at the back of the plant. All unusable scrap was fed to the hog to make the wood chips that go into particle board, one of the least profitable products the company manufactured. "When we get upset," he explained, "we take finished lumber and feed the hog." (And the company never knows where the chips came from. After all, you can't tell scrap wood from finished lumber once it is reduced to chips.) There is a problem with this story. When we talk...
Words: 468 - Pages: 2
