1. Veneer Usage in Plywood Construction By T. Kyle Freres and Andrew Witt Senior Design Spring 1999 Dr. Richard Barr

2. Background W Freres Lumber Co. Inc. has produced high-quality wood products for over sixty years. Veneers have been the primary focus of production. W Last year the company purchased a plywood mill and began producing plywood panels.

3. Background (continued) W Plywood panels are made of thin sheets of peeled wood, called veneers. W Veneers from the company’s mills are sent in-house to the plywood mill as well as sold on the open market. W The veneers are “layed-up” on a production line with layers of glue between them.

4. Plywood Construction W Once the desired “ply” and thickness is reached, the sheets are pressed, trimmed, stacked, and sent to the customer. W The plywood panels are distributed nationally to a variety of customers for structural or decorative purposes.

5. Problem W Is there an optimal combination of veneers to be used in plywood construction? W Can material costs be lowered by using a linear programming model?

6. Current Philosophy W The mill has depended on the expertise of its managers since it was purchased. W Veneer combinations have been chosen by managers based on many years of experience. W Essential production figures are known, but in depth calculations have not been the primary concern.

7. Solution W A Linear Programming Model was constructed in GAMS to model material costs W Material Costs considered: l Veneers used in panels l Glue usage in panels W Total material cost was minimized

8. Variables W Veneers l 1/10, 1/8, and 1/6 inch in Fir and Off Species W CD 54in W CD 27in W Fishtail W Utility 27in W Constructions l Nineteen different plywood constructions l 3/8 in to 3/4 in panels l 3 ply to 7 ply panels W Glue cost per panel

9. Model Example

10. Calculations W All calculations were performed on “3/8’s” basis. l This is industry standard for both plywood and veneer. W Eg. Veneer price per sheet is “Dollars 3/8’s” l 1/8(price)*3 = 3/8’s dollars * (surface area factor) = 3/8’s $ per thousand surface

11. Conclusions W The optimal solution value from our model was approximately $1.1 million for the week period. W Actual wood costs for that same period were $707,000, lower than our value. W This was offset by sales of high grade veneer on the market, bringing the actual cost of wood closer to our optimal solution.

12. Conclusions (continued) W Veneers used in the solution l 10firFT52932 units l 10firCD5468904 l 10offFT32868 l 10util2739911 l 8firFT57602 l 8firCD5455974 l 6firCD546468 l 6firCD276468

13. Conclusions (continued) W Plywood constructions used in solution l Ply3- 3ply, 3/8 in l Ply4- 5ply, 1/2 in l Ply7- 4ply, 1/2 in l Ply9- 5ply, 5/8 in l Ply15- 5ply, 23/32 in l Ply17- 7ply, 23/32 in

14. Conclusions (continued) W Calculated optimal glue cost vs. actual glue cost we find: l optimal glue cost: $8.5 3/8’s per thousand l actual glue cost: $10.19 3/8’s per thousand W Calculated optimal wood cost vs. actual wood cost: l optimal wood cost:$218.57 3/8’s per thousand l actual wood cost:$190-200 3/8’s per thousand W Why these figures?

15. Further Study W This model could only focus on a small piece of a large-scale production operation. Inclusion of more production information could greatly aid the accuracy of the model.

16. Acknowledgements W We would like to thank the following people for their support and contributions to the project l Wayne Pape: Manager, Freres Lumber Co. Inc. l Ted Freres: President, Freres Lumber Co. Inc. l Dr. Richard Barr: Professor and GAMS Consultant

17. Questions Anyone?