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Introduction The first part of this analysis is based on data collected from a Northern Wisconsin chip mill. Wood was purchased on a weight scale basis with a year-round conversion factor of 4600lbs per cord of aspen and a delivery fee of $99 per weight scaled cord. The scales used were accurate to +/- 10 lbs for a truckload of pulpwood. After wood was peeled using a cambioring debarker, it was either chipped, or selected out by bolt for sale as peeled roundwood. Bark was assumed to be a waste product sold at a net price of 7$ per green ton, with proceeds being used to offset the cost of delivered price of purchased pulpwood. The mill dealt with three primary types of customers. Type A customers purchased clean pulp chips on a bone-dry unit (BDU) basis (2400lbs of bone-dry chip equivalent) f.o.b. the chip mill. Large ovens in the mills laboratory were used to determine the moisture contents of sample chips to be sold in BDUs. Type B customers purchased on the basis of green tons of chips, and type C customers were interested in peeled pulpwood purchased on a stick-scale cord basis. The moisture content (MC) of sticks to be sold to type C customers was reduced to 25% on an ovendry basis (OD) and sticks were decked and held through a summer to allow for proper drying The wood purchased by customer C was typically larger than 6 in scaling diameter, had little decay with the exception of white rot, and was generally of slightly better quality than the average bolts chipped by the mill. Purchase prices of wood for type C customers on a stickscaled cord basis were derived from estimates, since the wood could not be properly scaled prior to drying. For the initial part of the analysis, raw material cost equivalent for aspen was calculated for each of the three types of customers on the basis of BDUs, green tons, and stick scaled cords. Variation in the time of year the wood was harvested and species composition (possibility of soft maple or white birch mixed in with aspen) of the pulpwood purchased were also examined to determine what affects, if any, they would have circumstances surrounding sale on behalf of the chip mill, both overall, and on an individual customer basis. After all of the above aspects were analyzed, an experimental design was developed based on the compiled data to reflect the experiment, with consideration of cost as the limiting factor. The second portion of the analysis served as a follow up to the dry lab data from the first portion and was used to create a study to further examine the afore mentioned areas of interest. This was based on the raw data of multi-cord samples of a woods-run mix aspen bolts which were taken from a typical logging sale that took place during a normal winter, with no excessive hold over time between harvest and delivery of bolts to the mill. Bolt diameters were measured outside bark, numbered, and then remeasured after they were peeled. The bolts were also weighed and stick scaled before and after peeling and samples of chips and bark were taken from the bolts. No numbers were actually placed on the bolts for any of the measurements taken and were only maintained to ensure integrity at the sample level. Multi-cord samples of soft maple and white birch were measured and tested in the same manner. The procedures for the second portion were mostly the same as the ones for the first. However, comparison between seasonal weights for aspen was more closely examined and compared to the findings of the initial study. The experimental design was also closely inspected to find room for improvement in additional studies for the mill.

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Jeff Van Remortel, Ken Price, Paul Kaz, Jake Tumm

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Part 1
Dry Lab To make an estimation of the costs associated with production of the three products sold by the mill, some assumptions had to be made and/or general average values had to be found for the species used. These included percentage of wood and bark, specific gravity (SG) of wood and bark, and moisture contents (MC) of wood and bark. These values were obtained from secondary literature; namely Marden et al. For clarity and discussion, the specific gravity of wood is defined as the oven dry weight of the wood divided by an equivalent weight of water. The oven dry weight is the weight of the wood with all moisture removed. The equivalent weight of water is the weight of water that would occupy the same volume as the wood does when the wood is in the green condition. In other words, the specific gravity of wood in the green condition is the oven dry weight of wood divided by the cubic foot volume of the wood in the green condition multiplied by the density of water (62.4 lbs/ft3). Once these values were obtained, it was necessary to calculate the combined total cubic feet of wood and bark contained in a weight scaled cord. The mill used 4600 lbs as one weight scaled cord. To determine the cubic feet of wood and bark in a weight scaled cord, the following general equations were used:
ft3 wood x SG wood x 62.4 lbs/ft3 = dry wt. of wood; dry wt. of wood x (1 + MC wood) = green wt. of wood ft3 bark x SG bark x 62.4 lbs/ft3 = dry wt. of bark; dry wt. of bark x (1 + MC bark) = green wt. of bark green wt. of wood + green wt. of bark = 4600 lbs.

This is computed with the assumption that the MCs are on the oven dry basis and SGs are on the green basis. The values used for aspen were: SG wood .35, SG bark .5, MC wood .953, and MC bark .661. The cubic foot volumes of wood and bark were calculated by multiplying the total cubic foot volume by the fractional percentage of each. The percentages used were: wood, 88.2% and bark, 11.8%. The only unknown in the equation was the total cubic foot volume of wood and bark. The ft3 volume of the wood or bark in the respective equations was found by multiplying the estimated total by the fractional percentage of each. The total was adjusted until the equation equaled 4600 lbs. This gave the cubic foot volume that would be contained in 4600 lbs using the given SGs and MCs. Cost of Wood and Bark Because all of the wood is peeled for each of the three products before being sold and the bark is sold separately, it is necessary to calculate the cost of only the wood fiber contained in each cord. To do this, the value of the bark in each cord is subtracted from the price paid for each cord. The value of the bark is calculated by dividing the green weight of the bark by 2000lbs to convert it to tons and multiplying by $7.00 per ton, which is the selling price. The calculated value of wood and bark contained in a cord of aspen using the values and assumptions stated above are: $2.25/cord for bark and $96.75/cord for wood. Cost per Bone Dry Unit (BDU) A bone dry unit (BDU) is defined as 2400 lbs of bone dry chip equivalent. To calculate the raw material cost of a BDU, the dry weight of wood is divided by 2400lbs, which yields the number of BDUs per cord. The inverse of this value (1 divided by the value) is found and gives the number of cords per BDU. Finally, this value is multiplied by the cost of wood per cord to calculate the cost per BDU. The following table illustrates the numbers in this calculation.

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Table 1. Calculation of the raw material cost for a bone dry unit (BDU) of aspen pulp chips where one cord equals 4600 lbs.
Dry wt. of wood (lbs) BDU's per cord Cords per BDU Cost per BDU 2026.05 0.844 1.185 $114.61

Cost per Green Ton of Chips (GTC) A green ton of chips (GTC) is simply one ton, 2000 lbs, of chipped wood fiber with no bark. To calculate the raw material cost of a GTC, the green wt of wood is divided by 2000 lbs to convert to tons, which gives the amount of GTC per cord. The inverse (1 divided by the value of this number) is found and gives cords per GTC. This value is then multiplied by the cost of the wood to get cost per GTC. The following table illustrates the numbers in this calculation. Table 2. Calculation of the raw material cost of a green ton of chips (GTC) of aspen where one cord equals 4600 lbs.
Green wt. of wood (lbs) GTC per cord Cords per GTC Cost per GTC 3956.88 1.978 0.505 $48.90

Cost of a peeled stick-scaled cord (PSC) A peeled stick-scaled (PSC) cord is a cord of peeled wood, no bark. The size of one PSC is the standard 4 x 4 x 100. To calculate the cost of a PSC, an additional assumption had to be made that the cubic foot volume contained in a stick scaled cord was the same as the cubic foot volume contained in an unpeeled, weight scaled cord. This would not always hold true, but is the best assumption that could be made in this circumstance. To calculate the raw material cost of a PSC the cubic foot volume of wood in the weight scaled cord (WSC) was divided by the assumed cubic foot volume of wood in a PSC. This gives PSCs per WSC. The inverse of this number is found by dividing 1 by the value, which equals WSCs per PSC. This value is then multiplied by the cost of wood to obtain the price per PSC. The following table illustrates the numbers in this calculation. Table 3. Calculation of the raw material cost of a peeled stick-scaled cord (PSC) of aspen. WSC represents a 4600 lb weight scaled cord.
ft3 wood per WSC ft wood per PSC PSC's per WSC WSC's per PSC cost per PSC
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92.768 105.179 0.882 1.134 $109.69

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Variability with Season The raw material costs calculated above will vary seasonally. This is because moisture contents of the wood and bark fluctuate with the changing seasons in the lake states. Specifically, on average, the moisture content of aspen is highest in the winter and lowest in the summer. This will have an effect on the raw material costs of the three products produced by the mill. These costs were calculated using average MCs from Marden et al for the different seasons. The following table illustrates the effect of the varying moisture contents on raw material costs. Table 4. Raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) of aspen adjusted for different moisture contents (MC) throughout the year.
Winter MC $122.58 $48.41 $117.33 Summer MC $108.11 $49.37 $103.48 Average MC $114.61 $48.90 $109.69

Cost per BDU Cost per GTC Cost per PSC

The effect of varying moisture contents is that in the winter when the MC is higher, the mill is buying more water per cord and the reverse is true in the summer when MC is lower. This explains why there is the fluctuation in the cost per BDU. In the winter, more water has to be removed to get one BDU. The cost per GTC fluctuates only slightly and is mostly due to the difference in the density of the wood where density is defined as pounds per cubic foot. As the MC decreases, so does the density because the lost water is mostly replaced with more air space and there is less weight per cubic foot. Therefore, it takes more cubic feet to make 4600 lbs. The greatest fluctuation in MC occurs in the wood rather than the bark, so the mill is buying more cubic feet of wood per WSC, but it has a lower density and more resources must be used to make a GTC, thus increasing the cost of a green ton of chips. As for the cost per PSC, it is likely that the cubic feet per PSC will be higher than estimated. As mentioned previously it was assumed that the cubic feet contained in a PSC was the same as the cubic feet contained in a weight scaled cord of wood and bark. That said the calculated numbers show only a small difference in the cost per PSC with varying MCs. As with GTCs this is related to density, only it has the opposite effect. A lower density in summer yields more cubic feet per WSC and thus more PSC per WSC, thus lowering the raw material cost of a PSC. Effect of Adding Birch and/or Soft Maple While the main species the mill buys is aspen, it is very common for many stands of aspen to have a mix of other species in them. Soft maple and birch are common species found in aspen stands and may be mixed in with shipments of aspen when delivered to the mill. Therefore, it is important to investigate the potential impact the inclusion of these species may have on the mills raw material costs. In order to do this SGs and MCs for these species had to be obtained. These were found in the wood handbook and from Bowyer and Haygreen. The SGs used for soft maple were .49 for wood and .54 for bark and the MCs used were .58 for wood and .60 for bark. For birch, the SGs used were .48 for wood and .56 for bark and the MCs used were .89 for wood and .54 for bark. All calculations were done as described above. The following table summarizes the results

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of the calculations and illustrates the effect of each species on raw material costs for each product. Table 5. Raw material costs for a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) for aspen, soft maple, and birch using specific gravity and moisture content values obtain from secondary sources.
Cost per BDU Cost per GTC Cost per PSC Aspen $114.61 $48.90 $109.69 Soft Maple $96.79 $51.05 $129.70 Birch $113.07 $49.86 $148.42

Given these calculations, it appears that using soft maple and birch will not have a significant impact on the mills overall raw material costs. Soft maple does have a somewhat lower cost per BDU and the cost per PSC is higher for soft maple and birch. However, the assumed cubic foot volume per PSC was kept constant for all species. This is not very likely to be the case, but it is the best assumption that can be made. Therefore, there is the least confidence in the values calculated for the costs per PSC. Based on the numbers in table 5, the chip mill may want to consider limiting the amount of soft maple and birch that ends up as peeled sticks, however, the efforts that would be required to implement such a standard may not worthwhile. As for the customer that buys the peeled sticks, if the price is the same, it should not matter to them if there is soft maple and birch in the mix. Overall the three different species will have very little effect on the raw material cost per GTC. This is because the wood is purchased on a weight scale basis at a certain MC and the product going out is sold on a weight basis at basically the same moisture content. The difference seen is because of the different densities, similar to the seasonal fluctuations of MC for aspen, only the densities change between species in this case. Having each of these species in the mix should be acceptable to both the chip mill and the purchaser of the green chips. The raw material cost per BDU is slightly lower for soft maple. This is mostly due to the fact that it has a somewhat higher SG and a much lower MC. Therefore, less water has to be removed from soft maple wood fiber to make a BDU compared to other species. Experimental Design In order to better determine the costs of raw materials for the three products sold by the mill and the effect of using soft maple and birch, a relatively simple experiment could be performed at the mill using existing equipment and personnel in a scenario that represents normal operating conditions. The experiment will look at all three species separately; aspen, birch, and soft maple. The following procedure should be done separately for each species and measurements and calculations should be carefully recorded at every step. A truck load, or equivalent amount of each species representing wood of average size and quality that is normally run through the mill should be weighed and stick scaled, with bark. Also the diameter of both ends of every stick should be carefully measured and recorded for outside bark diameter. The sticks should then be run through the debarker as if the stick was being sold as a peeled stick. The truck should be re-weighed empty. A sample of the bark large enough to fill most or all of the trays in a drying oven should be taken and weighed on the laboratory scales

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as soon as possible. The debarked sticks should again have the diameter at both ends carefully measured and recorded. The wood should then be loaded back on the truck, re-weighed and re-stick scaled. If practical, the sticks that would normally be sold as In a PSC should be separated, stick scaled, and their diameters measured and logged separately. This experiment may be too small in volume to represent an adequate sample, however, it may yield a better representation of cubic feet of wood per PSC than was originally available from the calculated data. Next, the remaining peeled sticks should be run through the chipper. A large enough sample of chips sufficient to fill most or all of the pans in a drying oven should be collected. These chips should be weighed on the laboratory scales as soon as possible after collection to reduce moisture fluctuations. The wood chips and bark should then be spread out on the drying pans and placed in drying ovens. If there are not enough drying ovens for all the samples, they can be stored for a while as long as the weight of each sample was recorded soon after being collected. The chips should be dried completely, bone dry, and re-weighed. The difference in the weights divided by the weight before drying multiplied by 100 gives the percent MC on a green basis. Dividing by the weight after drying gives the MC on an oven dry basis. Using Smalians formula, average the areas in square feet of both ends of each log and multiply by the length in feet to get the cubic foot volume of each log. The cubic foot volumes of each log should be added together to get a total volume for each sample with and without bark. To find the cubic foot volume of bark, subtract the volume of wood from the total volume of wood and bark in cubic feet. It should be noted that logs lost in the debarker will not be counted in the cubic foot volume without bark, reflecting actual conditions. The total weight of wood and bark is calculated by subtracting the empty weight of the truck from the weight with the sticks before peeling and the total weight of wood is found by subtracting the empty weight of the truck from the total weight after peeling. To find the weight of the bark, subtract the weight of the wood from the weight of the wood and bark. The fractional percent wood in a weight scaled cord is found by dividing the total weight of wood by the total weight of wood and bark. The fractional percent bark is this number, subtracted from 1. Once the above calculations and measurements have been made and recorded, the SG of wood and bark can be found for each species using the following equations.
SG - wood = wt of wood / [ft3 wood x 62.4 lbs/ft3 x (1+ (green MC wood /1- green MC wood))] SG - bark = wt of bark / [ft3 bark x 62.4 lbs/ft3 x (1+ (green MC bark /1- green MC bark))]

These calculated SGs and percents wood and bark are a much better indicator of the actual condition of the wood and bark being used by the mill than the values obtained from secondary literature. Some other calculations needed are described here. The number of weight scaled cords is found by dividing the total weight of wood and bark by 4600. Total ft3 per weight scaled cord is the total ft3 of wood and bark divided by the number of weight scaled cords. The ft3 of wood in a weight scaled cord is calculated by dividing the total ft3 of wood by the number of weight scaled cords. The ft3 of bark is the difference between the two. To find the ft3 of wood per peeled stickscaled cord, divide the total ft3 by the number of stick scaled cords measured after the sticks were peeled. Alternatively, the ft3 volume of just the sticks that would have been sold peeled divided by the stick scale of these same sticks, would give an even better estimate of the ft3 per PSC. As
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noted above, this may not be feasible, as the sample may not contain enough logs that would normally be sold peeled. If that were the case, the experiment could have a subset of logs that would normally be sold as peeled sticks and measure the ft3 volume per stick scaled cord from this subset to be used in the raw material costs per PSC. All other calculations should still come from the original sample numbers. The same calculations described above would be made to determine the raw material costs for each of the three products using the numbers measured and calculated in the experiment.

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Part 2
Study and Additional Information The raw material costs for each product sold by the mill were calculated from data collected in an experiment much like the one described above. The following tables illustrate the measured and calculated values from the experiment used in calculating the raw material costs and the result of these calculations. Table 6. A list of the values used in calculation of the raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) from aspen, soft maple, and birch. WSC represents a weight scale cord, 4600 lbs.
% wood % bark MC wood MC bark SG wood SG bark ft3 wood and bark ft3 wood ft3 wood and bark per WSC total WSC's ft3 in PSC total PSC wt. wood and bark (lbs) wt. wood only (lbs) Aspen 75.07 24.93 52.0 38.0 0.387 0.525 614.25 466.78 90.33 6.80 84.79 5.505 31,282 23,483 Soft Maple 85.02 14.98 51.0 46.0 0.505 0.494 382.86 319.44 72.90 5.25 71.46 4.47 24,160 20,540 Birch 82.90 17.10 47.0 45.0 0.503 0.540 390.88 325.97 77.23 5.06 72.92 4.47 23,280 19,300

Table 7. Value of bark and cost of wood per weight scaled cord (WSC) and calculated content of bone dry units (BDU), green tons of chips (GTC), and peeled stick-scaled cords (PSC) per WSC and WSCs per unit of each for aspen, soft maple, and birch. Value of bark Cost of wood BDU's per WSC WSCs per BDU GTC per WSC WSCs per GTC PSC per WSC WSCs per PSC Aspen $4.17 $94.83 0.68 1.47 1.71 0.59 0.81 1.24 Soft Maple $2.18 $96.82 0.81 1.23 1.99 0.50 0.85 1.17 Birch $2.83 $96.17 0.84 1.19 1.90 0.53 0.88 1.13

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Table 8. Raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) for aspen, soft maple, and birch using values from a mill study.
Cost per BDU Cost per GTC Cost per PSC Aspen $139.00 $55.60 $117.15 Soft Maple $119.00 $48.59 $113.76 Birch $114.86 $50.73 $108.88

Table 9. Raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) for aspen, soft maple, and birch using values obtain from secondary sources.
Cost per BDU Cost per GTC Cost per PSC Aspen $114.61 $48.90 $109.69 Soft Maple $96.79 $51.05 $129.70 Birch $113.07 $49.86 $148.42

As seen in Table 8, there are slight differences in the raw material costs per BDU, GTC, and PSC between aspen, soft maple, and birch. Table 6 illustrates the variables that affect this difference and Table 7 represents the values obtained based on calculations from the numbers found in the study. The affect of these variables is discussed in part one. Specific gravity and moisture content have the greatest impact on the differences observed. These figures represent much better calculations of the raw material costs having the benefit of actual numbers from a sample of wood used in the mill. Table 9 is a repeat of Table 5 and present for comparison. This illustrates the value of taking the time to do a study. Some of the values are quite close, but others differ by a significant amount. Not doing the study could have lead to making some decisions that could have unknowingly lost money. It can be seen that aspen has the highest cost for raw material, and using soft maple and birch can actually be a cost savings, findings which differ from those of the dry lab. Table 10 shows how the raw material costs of aspen differ by season. Table 11 is a repeat of Table 4, the values calculated for aspen without doing the study.

Table 10. Raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) of aspen adjusted for different moisture contents (MC) throughout the year (calculated from study data) Table 11. Raw material costs of a bone dry unit of chips (BDU), a green ton of chips (GTC), and a peeled stick-scaled cord (PSC) of aspen adjusted for different moisture contents (MC) throughout the year. (calculated from data from secondary sources)

Winter MC Cost per BDU Cost per GTC Cost per PSC $141.04 $55.70 $120.33 Winter MC $122.58 $48.41 $117.33

Summer MC $138.20 $57.96 $108.29 Summer MC $108.11 $49.37 $103.48

Average MC $139.00 $55.60 $117.15 Average MC $114.61 $48.90 $109.69

Cost per BDU Cost per GTC Cost per PSC

The change in raw material costs are a result of seasonal variation of MCs and the effect on density as discussed earlier. The reason the values are different between the study and the calculation from secondary data reflect the fact that the SGs used are quite different. The SG for wood used in the dry lab was .35 while the calculated SG from the study was .39.

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Also the average MC used in the dry lab was slightly different from the one found for the aspen in the study. However, given no other data, the MCs used for the summer and winter were the same in both sets of calculations. The other difference in the calculations is the percent of wood and bark. There was a much higher percentage of bark found in the study versus the dry lab. This is because some of the sticks never came out of the debarker and as a result, the lost wood fiber ended up as bark. This commonly occurs with wood that is too small or misshapen. All of these are reasons the raw material costs varied between the values calculated from data in the study and those derived from secondary sources. Critique of the Experimental Design Overall the design of this study seems good. The study was conducted with minimal disruption to the operation of the mill. It likely slowed mill operations, but the value of the information gained far out weighs the loss in production. The procedures were able to be preformed with existing equipment and personnel. A potential addition to the experimental design would be a subset of logs that would normally be sold as peeled sticks and measure the cubic foot volume per stick scaled cord from this subset to be used in the raw material costs per PSC. All other calculations should still come from the original sample numbers. This would allow for a more accurate calculation of the raw material cost per PSC. The sticks sold peeled are typically of better quality and generally larger than 6 inches in diameter and therefore, would likely have a different volume per cord. The experiment could be repeated at various times throughout the year to account for seasonal variations. Once in the middle of the summer, once in the fall and once in the middle of winter would give a much more accurate calculation of the changes seen throughout the seasons in MC and the influence on raw material costs. This may be more than is necessary as the figures obtained give a pretty good idea of what is happening. Depending on just how much doing the study affects productivity it may not be worth repeating it, or may only be worth doing in the summer or winter. This is something that would have to be determined by the mill.

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Bibliography
Bowyer, Jim and John Haygreen. Forest Products and Science 4th Edition. Iowa: Iowa State Pr, August 1996. Kallio, Edwin, David C. Lothner, and Richard M. Marden. Wood and Bark Percentages and Moisture Contents of Minnesota Pulpwood Species. 1975. Simpson, William and Anton TenWolde. Physical Properties and Moisture Relations of Wood. Wood Handbook. Madison: Forest Service, 1974. 3-1 to 3-25.

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