An application of business activity modeling to regional production and national distribution of plywood
2004
Seale, R.D. | Seale, A.D. Jr | Leng, J.
Markets for many of the products produced from wood, such as lumber, structural panels, particleboard, pulp, and paper, do not behave according to the economic assumptions of pure competition. Typical linear programming models are not well suited to modeling markets for quantitative decision analysis because many of the individual firms are large enough to impact market price. A new modeling technique, Business Activity Modeling, which is based on components of demand analysis, linear programming, and reactive programming, was tested on the market for structural plywood. The model allows a producer to quantitatively determine optimum production and distribution levels for spatially separated markets. The analysis effectively simulated regional production and national distribution of plywood for a hypothetical company. The modeling technique may also be suitable for petroleum products, steel, aluminum, or any market not characterized as purely competitive.
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