Question

American Wood, LLC, harvests timber and delivers logs to timber mills for sale. The company was founded 70 years ago by Pete Wood. The current CEO is Paula Wood, the granddaughter of the founder. The company is currently evaluating a 5,000-acre forest it owns in Oregon. Paula has asked Steve Boles, the company’s finance officer, to evaluate the project. Paula’s concern is when the company should harvest the timber. Lumber is sold by the company for its “pond value.” Pond value is the amount a mill will pay for a log delivered to the mill location. The price paid for logs delivered to a mill is quoted in dollars per thousands of board feet (MBF), and the price depends on the grade of the logs

Answer 1

The concern of Paula is correct because its very important to identify the right time for harvest to have the highest return on the yield.

Being a financial officer i shall guide you on the following points to kept in mind.

1.The market scenarios should be kept in mind for the prices of logs.

2. The quality of logs sgould be kept in mind to maintain customer satisfaction.

3.The quotation of prices should match the quality of the logs delivered.

4.With harvest cycle the operating cycle of the organisation shall also be seen.