### Abstract

The objective of this paper is to ascertain if the common sawmill efficiency measure, over-run, bears a significant relationship to the ultimate measure of efficiency-profitability. A data set of log grades and lumber yields from twelve batches of red oak logs, representing about four weeks of production, was collected from a mill in central Pennsylvania. The over-run and actual profitability of each batch were calculated from mill results. For comparison, each batch was optimized through a linear programming technique to determine potential mill profitability under prevailing log and lumber prices; the corresponding over-run of each optimized batch was calculated. Stepwise linear regression techniques were utilized to prove a hypothesis that no relationship exists between over-run and profitability, either actual profit as realized by the sawmill studied or theoretically optimal profit as determined by a linear programming solution. Simple linear regression was then used to validate the result. The study demonstrates clearly that, in this case, over-run is not a predictor of profitability, and as influenced by a company's choice of log scale, is merely a relative measure of operational efficiency that may lead to mistaken assumptions about mill profitability.

Original language | English (US) |
---|---|

Pages (from-to) | 291-298 |

Number of pages | 8 |

Journal | Wood and Fiber Science |

Volume | 39 |

Issue number | 2 |

State | Published - Apr 1 2007 |

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### All Science Journal Classification (ASJC) codes

- Forestry
- Materials Science(all)

### Cite this

*Wood and Fiber Science*,

*39*(2), 291-298.

}

*Wood and Fiber Science*, vol. 39, no. 2, pp. 291-298.

**Impact of over-run on profitability of hardwood sawmills.** / Ray, Sr., Charles David; Wadhwa, Vijay; Michael, Judd Harrison.

Research output: Contribution to journal › Article

TY - JOUR

T1 - Impact of over-run on profitability of hardwood sawmills

AU - Ray, Sr., Charles David

AU - Wadhwa, Vijay

AU - Michael, Judd Harrison

PY - 2007/4/1

Y1 - 2007/4/1

N2 - The objective of this paper is to ascertain if the common sawmill efficiency measure, over-run, bears a significant relationship to the ultimate measure of efficiency-profitability. A data set of log grades and lumber yields from twelve batches of red oak logs, representing about four weeks of production, was collected from a mill in central Pennsylvania. The over-run and actual profitability of each batch were calculated from mill results. For comparison, each batch was optimized through a linear programming technique to determine potential mill profitability under prevailing log and lumber prices; the corresponding over-run of each optimized batch was calculated. Stepwise linear regression techniques were utilized to prove a hypothesis that no relationship exists between over-run and profitability, either actual profit as realized by the sawmill studied or theoretically optimal profit as determined by a linear programming solution. Simple linear regression was then used to validate the result. The study demonstrates clearly that, in this case, over-run is not a predictor of profitability, and as influenced by a company's choice of log scale, is merely a relative measure of operational efficiency that may lead to mistaken assumptions about mill profitability.

AB - The objective of this paper is to ascertain if the common sawmill efficiency measure, over-run, bears a significant relationship to the ultimate measure of efficiency-profitability. A data set of log grades and lumber yields from twelve batches of red oak logs, representing about four weeks of production, was collected from a mill in central Pennsylvania. The over-run and actual profitability of each batch were calculated from mill results. For comparison, each batch was optimized through a linear programming technique to determine potential mill profitability under prevailing log and lumber prices; the corresponding over-run of each optimized batch was calculated. Stepwise linear regression techniques were utilized to prove a hypothesis that no relationship exists between over-run and profitability, either actual profit as realized by the sawmill studied or theoretically optimal profit as determined by a linear programming solution. Simple linear regression was then used to validate the result. The study demonstrates clearly that, in this case, over-run is not a predictor of profitability, and as influenced by a company's choice of log scale, is merely a relative measure of operational efficiency that may lead to mistaken assumptions about mill profitability.

UR - http://www.scopus.com/inward/record.url?scp=34249075705&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=34249075705&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:34249075705

VL - 39

SP - 291

EP - 298

JO - Wood and Fiber Science

JF - Wood and Fiber Science

SN - 0735-6161

IS - 2

ER -