This study presents a multiregional model of the soft wood forest products industry in the United States, designed to describe the dynamics of interregional competition in the industry and to provide means for policy experimentation and short-term projection of regional market shares. Two products (softwood lumber and plywood), five product supply regions (including Canada), and six product demand regions are recognized. The design of the model is based on a combined top-down/bottom-up approach and consists of three interdependent components: (1) the aggregate product market, (2) regional product markets, and (3) regional factor markets. Model solutions are obtained by the simultaneous determination of national level product prices and quantities and allocation of equilibrium quantities across producing regions on the basis of their relative prices and locational advantage. The model is evaluated in an historical simulation using data for 1950-84. Graphical analysis of simulated series suggests that the model replicates short-run trends as well as cyclical movements in aggregate demand and regional market shares. The results indicate that the short-run impacts of relative prices and locational advantage on regional market shares are generally small. Price responsiveness of regional market shares for lumber appear to be considerably lower than that of plywood, indicating greater degrees of regional substitution in the plywood market. The forecasting application of the model is demonstrated by extrapolating the complete structure for two years beyond the sample period. The projected trend during this two-year period is one of increasing demand for both lumber and plywood. Domestic producers' shares of the lumber market are expected to remain relatively stable. The results show that nearly all increases in demand for lumber in this period will be satisfied by Canadian imports.

Thesis (M.S.)--Massachusetts Institute of Technology, Alfred P. Sloan School of Management, 1982. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND DEWEY. / Includes bibliographical references. / by Henry M. Montrey, III. / M.S.

A questionnaire was sent to 2,111 U.S. pallet and container manufacturers to (1) estimate the total volume of hardwood lumber, softwood lumber, and wood-based panels used by the industry in 1991, (2) estimate lumber use by species category within the industry, and (3) predict shifts in the volumes of wood-based materials used by the U.S. pallet and container industry. Data from 656 pallet and container manufacturers were analyzed and used to estimate total industry use of the wood materials. Total 1991 hardwood lumber and cant use was estimated to be over 3.8 billion board feet and consumption was expected to increase 13% by 1993. Softwood lumber and cant consumption in 1991 was estimated to be over 1.8 billion board feet and an increase of 7% was expected by 1993. Softwood plywood use during 1991 was estimated to account for 271 million square feet (3/4" basis) and consumption was expected to increase by 13% through 1993. Oriented strandboard use for 1991 was estimated to be 36 million square feet (7/16" basis) and use of OSB was predicted to increase 25% by 1993. Oak was the largest single species group consumed by pallet and container manufacturers in 1991, accounting for over 1.6 billion board feet of lumber, cants, parts, and shook. Southern yellow pine consumption was an estimated 541 million board feet in 1991, followed closely by almost 500 million board feet of yellow-poplar, and over 227 million board feet of alder. Seventy percent of hardwood lumber and cant purchases (by volume) were made direct from the sawmill in 1991. Softwood lumber purchases were made either from a lumber broker (38%) or direct from the sawmill (37%). / Master of Science

The value-based approach to defining quality was used to investigate the value perceptions of softwood lumber treaters in the United States. Conjoint measurement techniques were used to estimate the trade-offs treaters make between quality enhancing attributes and price. Five intrinsic lumber attributes and five service attributes were chosen for inclusion in the study based on Hansen (1994) and personal interviews with treaters. Price was represented in the study relative to the current market price. Data were gathered in two stages through mail surveys of softwood lumber buyers at treating plants located in the United States. In the first stage, value ratings of 20 hypothetical combinations of lumber attributes and 20 hypothetical combinations of service attributes were obtained along with demographic information. In the second stage, value ratings of 20 hypothetical total products (combinations of both lumber and service attributes) were obtained. Utility functions for lumber value and service value were determined using ordinary least squares regression. Treaters gave the most importance to wane when evaluating the value of lumber packs. Price emerged as the second most important attribute in influencing treaters' perceptions of lumber value. Respondents considered the importance of the remaining lumber attributes in the following order: accuracy of grading, damage to lumber pack, and lumber straightness. A model to estimate the value of any combination of the attributes included in the study was developed. Simulation results suggest that treaters are willing to sacrifice $15.00 more per a thousand board feet for wane free lumber versus lumber with the maximum allowable wane. In the same fashion, respondents’ price sensitivity to other lumber attributes was determined. A service value utility function was developed based on the perceived value ratings. Price was the most important attribute in determining service value perceptions. Among all service attributes, lumber availability emerged as the most important. The second most important attribute in the determination of service value was reputation of the supplier. Respondents considered the supplier's ability to deliver lumber when promised as the third most important service attribute. The attributes, Supplier's ability to handle problems professionally and the ease with which supplier can be contacted by phone played a minor role in influencing service value. Based on the lumber value and service value analyses, lumber and service attributes were chosen for the final stage of data collection. Using a mail survey, perceived value ratings for hypothetical total products (lumber and service attributes) were obtained from the same respondents who provided data for the first stage of the analysis. Respondents in general, gave more importance to lumber quality than to service quality. Wane emerged as the most important attribute in influencing total product value. Price was considered to be the second most important attribute in the determination of perceived total product value. Respondents gave more importance to lumber availability than to reputation of the supplier while evaluating overall value. Accuracy of grading was considered to be the least important total product attribute. The results show that softwood lumber firms can differentiate themselves by providing wane free lumber and providing at least average service quality to their customers. The improved understanding of treaters’' needs and trade-offs should enable softwood lumber companies to plan the marketing strategies to achieve short- and long-term objectives while providing the most value to treaters. / Ph. D.