The Québec Ministry of Natural Resources Uses Linear Programming to Understand the Wood-Fiber Market

Abstract

In spring 1996, Québec's Ministry of Natural Resources began using a descriptive mathematical programming model to support various negotiations in the wood-fiber markets. The model, which uses linear programming to solve an economic-equilibrium program, allows the representative of the ministry to come to industry roundtables with accurate scenario analyses for the wood-fiber market. The tool we developed and implemented uses the large amounts of data available to government agencies to foresee and explain the general economic trends facing both lumber and paper producers. During its development, our team of operations-research experts, economists, engineers, and civil servants developed an unprecedented understanding of the wood-fiber market. The ministry incorporated these insights in subsequent government policy aimed at improving sawmill yield and stabilizing market behavior.

Construction of an economic model for prospective forest products manufacturing facilities

“…Linear programming has been a successful tool for modeling plywood mills, sawmills, forestry field operations, and various other resource-related issues in the forest industry (Field 1977). Gautier et al (2000) developed a linear programming model to aid Quebec Ministry of Natural Resources (MNR) officials in their understanding of the wood fiber markets in the province. Though the wood fiber market in Quebec operates freely, it was expected that this model could help all parties involved in the wood fiber trade better understand the components of the market.…”