...In the current environment, the softwood lumber dispute is further aggravated by supply shortages in the production of lumber in the United States stemming from environmental and habitat protection. Timber harvesting restrictions have the effect of curtailing the supply of lumber available for the market. In the case of harvesting restrictions related to the protection of spotted owl habitat, most of the timber affected is softwood lumber used extensively in the construction of houses. When the supply of lumber is restricted with no corresponding curtailment of demand, supply and demand analysis predicts that lumber prices will increase in the short run. This analysis, however, is very narrow and does not take into consideration the impacts of alternative sources of the product or substitutes for the product (Janigan, 2002). In the case of softwood lumber used in the construction of houses, there are few viable substitutes. There is, however, for homebuilders in the United States a reliable alternative source of softwood lumber. The alternative source is Canada. Therefore, while curtailing the harvesting of softwood lumber in the Pacific Northwest did lead to a reduction in the domestically produced supply of softwood lumber in the United States, the action did not lead to an immediate reduction in the overall supply of softwood lumber because lumber suppliers in Canada made up the difference. As a consequence, prices for softwood lumber did not change at once because of the timber...
Words: 306 - Pages: 2
...This essay examines Canada’s lumber industry, the Softwood Lumber Agreement with the US and how globalization, the industry and the agreement all play a factor in each other’s functions. This essay is not a detailed examination of Canada’s softwood lumber agreement but a generalized examination of how globalization influences and affects the lumber industry, and in turn, the softwood lumber agreement. Executive Summary Logging 200 years ago was a booming industry and started a chain reaction to building our nation. Today, technology and government regulations have changed how logs are harvested but the industry’s core function remains the same, to harvest logs for sale. Today the US is Canada’s largest lumber market, but once exports to Britain were more important. What remains the same through centuries of market fluctuations is Canada’s comparative advantage in lumber, Canada’s forests account for 10% of the world’s store. Globalization is bringing markets closer together and how this affects the lumber industry needs a closer analysis in how the lumber industry has evolved from hand falling trees to where the industry is today. Government regulations influence and control the lumber industry and this essay attempts to analyze the Softwood Lumber Agreement (its evolution, perspectives of, economic effects) and how globalization may affect future agreements. This essay also looks at globalization and the alternatives to the Softwood Lumber Agreement. Depending upon who...
Words: 3050 - Pages: 13
...The law of demand states “that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises.” (Henderson, 2014). Demand is the relationship between prices and the quantity of goods and services that are purchased at those prices. In other words, if higher prices are paid for products then a lower quantity will be demanded. The law of supply on the other hand states that “that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises as the market price rises, and falls as the price falls.” (Henderson, 2014). The word demand refers to the willingness and ability of people to purchase goods or service in the market. “The relationship between price and quantity demanded is true for most goods in the economy and in fact is so pervasive that economists call it the law of demand.” (Mankiw 2012). Supply is the connection between price and the quantity of goods and services that sellers offer for sale. The greater the price of a product or service the greater the quantity supplied. If the price of a commodity increases businesses increase production from other goods to production of the commodity in demand, thereby increasing the quantity supplied. When a product is in high demand for example high waisted skinny jeans which is this season’s fashion fad the demand at any given price will increase and the demand curve shifts outwards. However, when there is a decline in the size of the market...
Words: 1913 - Pages: 8
...Federick Weyerhaeuser was a successful businessman.He started buying timberland in Wisconsin,and then Minnesota.he invested a lot into Minnesota’s lumber industry. By the 1900s more than 400 lumber companies were operating in Minnesota. Minneapolis, Stillwater, and towns along the St. Croix River became beehives of logging activity due to the close proximity of white pine to navigable waterways and newly constructed railways. In just one week in 1875, one railroad company shipped 141 railcars of lumber through Stillwater to points south. In three short years, another railroad company more than doubled its shipment of lumber from 25 million feet to 54 million feet, while log rafts on the Mississippi River annually exceeded 89 million feet.While...
Words: 355 - Pages: 2
...Products The Role of the responder: Dave Pope, the plant Manager. Objective: The purpose of this report is to review Dave Pope’s concern about the company’s lumber stockroom operations. The stockroom situation was interfering with the productivity. To add with this, the President announced that the production levels would increase by 20% during the next month. Our objective is to fix this stockroom problem so that Dave would be able to meet the President’s demand of increase in productivity. Key Issues: * Stockroom operations. The company’s lumber stockroom operation was a big concern. There was in no way to know what was available before you get to the storage area. Because of that the metric was only a 50% chance of obtaining the needed lumber for the job. The stockroom situation was also interfering with the inventory. * Organizational structure. The company’s organizational structure was another issue. The company was organized in an old way and needs to be reorganized for better performance. * Maintaining Inventory records and changing demands. AWP did not have any formal inventory management system in place to maintain raw materials and finished goods. The inventory count is done manually and takes two days. They were completely not maintaining any inventory record whatsoever. The nature of demand also was difficult to predict as it varied from one year to the next. The metric was that the inventory turnover which relates inventory levels to the product...
Words: 1036 - Pages: 5
...Butler Lumber Case Management Accounting Case (1) Financial Planning: Butler Lumber Valuation 1. Although Mr Butler has seen an increase in his sales for the last few years, there are a few reasons why he needed a loan from the bank to keep his operations going. 1) Shortage of Cash: Despite good profits, Mr. Butler had experienced a shortage of cash from 1988 to 1990. During this period of time, there was a decrease in cash reserves, as well as in inventory turnover, indicating that Mr. Butler’s money had been tied up in his inventory. This can be resolved by working on his receivables turnover ratio, which decreased from 1988 to 1990, as seen in Appendix A. 2) Debt Consolidation: In late 1988, Mr. Butler took a loan of $70,000 that carried an interest rate of 11%. The annual interest payable to the bank compounded to his cash shortage problem. 3) Expansion of operational business: Additional investments in working capital and inventory purchases will be required to keep up with the company’s increasing sales volume. 2. As illustrated in Appendix B, assuming that 1991 sales volume will be $3.6 million, Butler Lumber will only need a loan of roughly $333,600.00 to finance the expected expansion in sales. The company’s estimate of the loan requirements is inaccurate. 3. In the first quarter of 1990, sales were $698,000, approximately 25.91% of the yearly revenue. Based on this ratio, we estimate that Butler Lumber Company will generate approximately...
Words: 3590 - Pages: 15
...Problem 3.1 Demand and Supply Curves. The following relations describe monthly demand and supply conditions in the metropolitan area for recyclable aluminum QD = 317,500 - 10,000P (Demand) QS = 2,500 + 7,500P, (Supply) where Q is quantity measured in pounds of scrap aluminum and P is price in cents. Complete the following table: Price Quantity Quantity Surplus (+) or Supplied Demanded Shortage (-) (1) (2) (3) (4)= (2)-(3) 15¢ 16 17 18 19 20 SOLUTION Price Quantity Quantity Surplus (+) or Supplied Demanded Shortage (-) (1) (2) (3) (4)= (2)-(3) By putting the values of P in the QD & QS equations: 15¢ 115000 167500 -52500 16 122500 157500 -35000 17 130000 147500 -17500 18 137500 137500 0 19 145000 127500 17500 20 152500 117500 35000 Problem3.2 Demand and Supply Curves. The following relations describe monthly demand and supply relations for dry cleaning services in the metropolitan area: QD = 500,000 - 50,000P (Demand) QS = -100,000 + 100,000P (Supply) Where Q is quantity measured by the number of items dry cleaned per month and P is average price in dollars. A. At what average price level would demand equal zero? B. At what average price level would supply equal zero? C. Calculate the equilibrium price/output combination. SOLUTION A. From the demand relation,...
Words: 2415 - Pages: 10
...Timber Industry Economic Profile Following is a discussion of the timber industry including how several economic factors affect it, including: price elasticity of supply and demand; positive and negative externalities; wage inequality; and monetary and fiscal policies. Price Elasticity Important to note is that the timber industry and the lumber industry are not one in the same and experience differences price elasticity. The price elasticity of demand for the timber industry is inelastic. Often landowners will hold inventory to sell at a later date if demand is low. The timber will not lose value in storage so price does not need to change. The price elasticity of supply for the timber industry is elastic, as prices typically increase in the spring due to low volume of timber as a result of winter weather. Possible Negative Externalities Recreational and Commercial Fishing: Corporations may elect not to harvest timber and lose earnings if timber harvesting damages the fish habitat. Water Pollution: If timber harvesting pollutes the public water system, costs may be incurred in the remunerations effort. Risk of Flooding: Increased runoff my decrease sewer capacity costing taxpayers additional money to repair the damage. Water-Quality Reduction: If timber harvesting decreases the quality of water, other companies that use the water to cool or clean their equipment or products may suffer damages. Possible Positive Externalities Recreational Opportunities:...
Words: 1805 - Pages: 8
...Costa Rica’s dry tropical forests have been under siege since 2014 from loggers looking to cash in on skyrocketing demand for precious hardwoods, especially cocobolo (Dalbergia retusa), also known as tropical rosewood. The illegal logging of cocobolo and other precious hardwoods threatens Costa Rica’s famous but understaffed national parks as loggers look to protected areas as the last untapped source of valuable lumber for export. The Convention on International Trade in Endangered Species of Wild Fauna and Flora, or CITES, lists cocobolo under Appendix II — the same category as hammerhead shark fins — in Costa Rica. This means it can be logged in prescribed amounts as long as an impact study determines its extraction is not harmful to the...
Words: 732 - Pages: 3
...Analysis of Alternatives Detailed Recommendations Answer to Case Questions Learnings II. SUMMARY OF FINDINGS: As seen in the case of Austin Wood Products, although the company is profitable and offers a variety of high quality products, there are a number of flaws and problems that the company face in different functional areas related to purchasing and supply management. One dilemma would be that the inventory and stock room operations are having a hard time keeping track and managing inventory and stock. There is no system that efficiently keeps track of how much inventory is at hand, what kind of lumber or materials are available in the stockroom, how much of the inventories are being taken by the workers, where they are, and whether or not certain inventories are missing. In other words, there are no records of the movement and breakdown of different materials and inventories with its exact quantity that will help the company easily determine its remaining inventory. It also takes two tedious days to count inventory which takes up the time and effort of 47 workers for 10 hours. Another dilemma is that the demand of different materials of wood varies per year. This makes it difficult for the company to...
Words: 2302 - Pages: 10
...DQ 1 ECO 561 Week 5 DQ 2 ECO 561 Week 6 Learning Team Assignment International Paper ECO 561 Week 6 DQ 1 ECO 561 Chapter 1 Quiz ECO 561 Chapter 2 Quiz ECO 561 Chapter 3 Quiz ECO 561 Week 4 Quiz ECO 561 Chapter 5 Quiz ECO 561 Chapter 6 Quiz ECO 561 Chapter 7 Quiz ECO 561 Chapter 8 Quiz ------------------------------------------------------------------------------------------ ECO 561 Chapter 1 Quiz (UOP Course) For more course tutorials visit www.tutorialrank.com Chapter 1 Quiz Question 1 As per the law of demand: When rates increase, ceteris paribus Question 2 In response to news reports that taking aspirins daily can reduce an individual's risk of a heart attack, there will most likely be Question 3 The number of pizzas this restaurant sells per week increases from 500 to 700. This could be caused by Question 4 Which of the following is consistent with the law of supply? Question 5 Suppose that video game cartridges are a normal good. If the income of video game players increases, you predict that in the market for videotapes Question 6 Apples and oranges are substitute goods. A freeze in Florida destroyed a good portion of the...
Words: 995 - Pages: 4
...money for very little work and investment of time and money. 1.9: False, The $5 Billion is a sunk cost and cannot be recovered. If the revenues are expected to continue to be lower than cost then it should be dropped and find a new venture for revenue. 1.10: President Lincoln was not under paid for his services in 1863. That $25,000 salary in 1863 would be worth $626.111.00 in today’s dollars based on the following calculation: 2011 price = 1863 price x(2011 CPI/1950 CPI) $626,111.00= $25,000.00x(225.4/9) Chapter 2 1: The supply and demand model can be used to in reverse to explain market outcomes by splitting the model into four sections and based on the position of the new equilibrium we can determine what factors caused the shift and the new equilibrium. 3: The term “other things constant” means there are numerous factors in why there are shifts in demand. Movement along the demand curve is a hypothetical situation where price affects demand by the consumer only if all other variables are assumed to stay the same. 2.1: The positive relationship between UI and the UR is the longer a...
Words: 573 - Pages: 3
...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
...key production planning considerations (which, when and how much of each to produce, methods of dealing with short/long term changes in capacity demand). Tour A: International Paper, Androscoggin Mill’s central ordering department receives all orders and places them in open slots in their weekly production cycles. The manager of operations control must take into consideration how many machines are available, which ones run what process, and how long each process runs. The production schedule is very detailed but remains flexible to allow for changes. Demand for paper products is cyclical in nature and fluctuates with the economy. A linear program ran each quarter to optimize the schedule. Similar size orders were grouped together to eliminate as much waste as possible. Trucks and railcars also had to be scheduled for shipments. . Tour B: Norcen Industries key production considerations would be scheduling. As a “job shop” they create a wide variety of products to fulfil customer orders. The production manager must make sure the workers were assigned and understood the correct tasks. Assigning the best operator to perform certain tasks help keep costs down and machines running efficiently. On-time deliveries are important to receive repeat orders. Small jobs were given preference to expedite billing. As drops in demand created fewer orders the foreman ran into bottleneck issues. 2. Identify potential bottlenecks (use process flow diagram in text) and discuss...
Words: 1629 - Pages: 7
...Wood VS. High density polyethylene (HDPE) Plastic Lumber. This paper is not to persuade the use of either Conventional, or “Green” building materials it is simply a comparison of the pros and cons of your design choices. Wood has been a standard building material for centuries. Craftsmen, suppliers and manufacturers always want to see more wood used in materials and goods. The high market value of a real wood floors, furniture, accents and finishes will always be a selling point in any big purchase. There is something wood; unlike other materials, brings that warm, rich inviting look no matter the application it has been implicated in. Even with the pride of ownership and demand for high price; Wood is also the highly coveted material of choice in the cooking profession when it comes to choosing utensils. Wood of course is an essential material in manufacturing instruments, wither it be jamming on a guitar or playing a musical-toon on an oboe. Also let us not forget all those number 2 pencils destroyed during ones educational career. Even with all these wonderful applications for wood just mentioned in this paragraph and the many more items wood can and still is used for; still cannot help it over-come its true fate in nature. Wood deteriorates. It cracks, it rots, its splinters, it is prone to mildew and mold, the list goes on. Of course one would argue that not all of these negative aspects of wood pertain to all of said items, sure it depends on where, what and...
Words: 1107 - Pages: 5
