A game theoretic simulation model for quality oriented timber supply to sawmills.

Abstract

The first aim of this study was to develop a simulation model describing the flow of different timber qualities to different firms. The second aim was to study preliminary the factors which affect timber distributions. In addition, we tested the hypothesis that in a small sawmill firm the traditional way of organizing timber procurement does not direct effectively good quality logs to the special production. The game theoretic approaching and the principles of Monte-Carlo simulation were applied in development of the simulation model. The most important factors of the model were tried to find for further studies with sensitive analysis. Empirical validation brought forth promising results in the area of one municipality. The buyer’s awareness of a marked stand, the seller’s willingness to sell a marked stand, the buyer’s ability to pay for wood and the proportion of first quality pine logs in a marked stand affected the distribution of pine logs. The results also supported the hypothesis that the traditional system, in which sawmills or their own forest departments procure themselves all timber needed, is not the most effective way to direct enough good quality timber to the special production.