SUMMARY

Cost SPOT MARKET CHASE - 1 CHASE - 2 LEVEL

US Spot Market $ 7,760,000 $ - $ - $ -

Regular Time $ - $ 2,910,000 $ 2,602,500 $ 2,430,000

Overtime $ - $ - $ 410,000 $ 80,000

Holding $ - $ - $ - $ 88,750

Hiring $ - $ 30,000 $ 21,000 $ -

Layoff $ - $ 17,000 $ 12,500 $ -

Shipping $ - $ 970,000 $ 970,000 $ 795,000

TOTAL COST $ 7,760,000 $ 3,927,000 $ 4,016,000 $ 3,393,750

 MIXED

$ -

$ 2,910,000

$ -

$ -

$ 30,000

$ 17,000

$ 970,000

$ 3,927,000
CHASE STRATEGY (MATCH DEMAND, VARYING WORK FORCE)
No Overtime

Cost / 1000
board feet JAN FEB

Demand 1,000,000 1,100,000

Worker 20 20
Estimated

Regular Production 50,000 1,000,000 1,000,000

Shortage / Surplus - (100,000)
Additional / Layoff Workers 50,000 - 2
Worker 20 22
Regular Production 50,000 1,000,000 1,100,000
Production Cost $ 150 $ 150,000 $ 165,000
Actual

Hiring cost / new employee $ 1,000 $ - $ 2,000

Layoff cost / employee $ 500 $ - $ -
Shipping cost $ 50 $ 50,000 $ 55,000
TOTAL COST $ 200,000 $ 222,000

US SPOT MARKET $ 400 $ 400,000 $ 440,000

FORCE)

MAR APR MAY JUN JUL

1,300,000 1,500,000 1,800,000 2,200,000 2,500,000

22 26 30 36 44
1,100,000 1,300,000 1,500,000 1,800,000 2,200,000
(200,000) (200,000) (300,000) (400,000) (300,000)
4 4 6 8 6
26 30 36 44 50
1,300,000 1,500,000 1,800,000 2,200,000 2,500,000
$ 195,000 $ 225,000 $ 270,000 $ 330,000 $ 375,000
$ 4,000 $ 4,000 $ 6,000 $ 8,000 $ 6,000
$ - $ - $ - $ - $ -
$ 65,000 $ 75,000 $ 90,000 $ 110,000 $ 125,000
$ 264,000 $ 304,000 $ 366,000 $ 448,000 $ 506,000

$ 520,000 $ 600,000 $ 720,000 $ 880,000 $ 1,000,000

 AUG SEP OCT NOV DEC

2,400,000 2,000,000 1,600,000 1,200,000 800,000

50 48 40 32 24
2,500,000 2,400,000 2,000,000 1,600,000 1,200,000
100,000 400,000 400,000 400,000 400,000
(2) (8) (8) (8) (8)
48 40 32 24 16
2,400,000 2,000,000 1,600,000 1,200,000 800,000
$ 360,000 $ 300,000 $ 240,000 $ 180,000 $ 120,000
$ - $ - $ - $ - $ -
$ 1,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000
$ 120,000 $ 100,000 $ 80,000 $ 60,000 $ 40,000
$ 481,000 $ 404,000 $ 324,000 $ 244,000 $ 164,000

$ 960,000 $ 800,000 $ 640,000 $ 480,000 $ 320,000

$ 2,910,000.0
$ 30,000.0
$ 17,000.0
$ 970,000.0
$ 3,927,000.0

$ 7,760,000
CHASE STRATEGY (MATCH DEMAND, VARYING WORK FORCE)
With Overtime

Cost / 1000
board feet JAN FEB

Demand 1,000,000 1,100,000

Worker 20 20
Regular Production 50,000 1,000,000 1,000,000
Shortage / Surplus - (100,000)
Overtime Production Capacity 25% 250,000 250,000
Can covered by overtime? No Need Yes
Estimated

Overtime Production - 100,000

Remaining Shortage / Surplus - -
Need additional workers? No No
Additional Workers Needed - -
Need to layoff? No No
Total layoff - -
Worker 20 20
Regular Production 50,000 1,000,000 1,000,000
Production Cost $ 150 $ 150,000 $ 150,000
Shortage / Surplus - (100,000)
Overtime Capacity 25% 250,000 250,000
Actual

Overtime Production - 100,000

Overtime Production Cost $ 200 $ - $ 20,000
Hiring cost / new employee $ 1,000 $ - $ -
Layoff cost / employee $ 500 $ - $ -
Shipping cost $ 50 $ 50,000 $ 55,000
TOTAL COST $ 200,000 $ 225,000

US SPOT MARKET $ 400 $ 400,000 $ 440,000

FORCE)

MAR APR MAY JUN JUL

1,300,000 1,500,000 1,800,000 2,200,000 2,500,000

20 21 25 30 37
1,000,000 1,050,000 1,250,000 1,500,000 1,850,000
(300,000) (450,000) (550,000) (700,000) (650,000)
250,000 262,500 312,500 375,000 462,500
No No No No No
250,000 262,500 312,500 375,000 462,500
(50,000) (187,500) (237,500) (325,000) (187,500)
Yes Yes Yes Yes Yes
1 4 5 7 4
No No No No No
- - - - -
21 25 30 37 41
1,050,000 1,250,000 1,500,000 1,850,000 2,050,000
$ 157,500 $ 187,500 $ 225,000 $ 277,500 $ 307,500
(250,000) (250,000) (300,000) (350,000) (450,000)
262,500 312,500 375,000 462,500 512,500
250,000 250,000 300,000 350,000 450,000
$ 50,000 $ 50,000 $ 60,000 $ 70,000 $ 90,000
$ 1,000 $ 4,000 $ 5,000 $ 7,000 $ 4,000
$ - $ - $ - $ - $ -
$ 65,000 $ 75,000 $ 90,000 $ 110,000 $ 125,000
$ 273,500 $ 316,500 $ 380,000 $ 464,500 $ 526,500

$ 520,000 $ 600,000 $ 720,000 $ 880,000 $ 1,000,000

 AUG SEP OCT NOV DEC

2,400,000 2,000,000 1,600,000 1,200,000 800,000

41 41 40 32 24
2,050,000 2,050,000 2,000,000 1,600,000 1,200,000
(350,000) 50,000 400,000 400,000 400,000
512,500 512,500 500,000 400,000 300,000
Yes No Need No Need No Need No Need
350,000 - - - -
- 50,000 400,000 400,000 400,000
No No No No No
- - - - -
No Yes Yes Yes Yes
- 1 8 8 8
41 40 32 24 16
2,050,000 2,000,000 1,600,000 1,200,000 800,000
$ 307,500 $ 300,000 $ 240,000 $ 180,000 $ 120,000
(350,000) - - - -
512,500 500,000 400,000 300,000 200,000
350,000 - - - -
$ 70,000 $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ - $ 500 $ 4,000 $ 4,000 $ 4,000
$ 120,000 $ 100,000 $ 80,000 $ 60,000 $ 40,000
$ 497,500 $ 400,500 $ 324,000 $ 244,000 $ 164,000

$ 960,000 $ 800,000 $ 640,000 $ 480,000 $ 320,000

$ 2,602,500.0

$ 410,000.0
$ 21,000.0
$ 12,500.0
$ 970,000.0
$ 4,016,000.0

$ 7,760,000
LEVEL STRATEGY (CONSTANT WORK FORCE, VARYING INVENTORY)
Maximize Inventory Capacity by Maximize Overtime in Early Year

Average Actual Demand / Month 1,325,000

Shipping Limitation 1,500,000
Average Worker / Month 27
Additional Worker 7
Hiring Cost $ 7,000

Cost / 1000 JAN FEB MAR

board feet

Demand 1,000,000 1,100,000 1,300,000

Shipping 1,000,000 1,100,000 1,300,000
Beginning Inventory - 350,000 600,000
Regular Production 50,000 1,350,000 1,350,000 1,350,000
Overtime Production - - -
Total Available Product 1,350,000 1,700,000 1,950,000
Ending Inventory 350,000 600,000 650,000
Regular Production Cost $ 150 $ 202,500 $ 202,500 $ 202,500
Overtime Production Cost $ 200 $ - $ - $ -
Holding Cost $ 25 $ 8,750 $ 15,000 $ 16,250
Shipping cost $ 50 $ 50,000 $ 55,000 $ 65,000
TOTAL COST $ 261,250 $ 272,500 $ 283,750

US SPOT MARKET $ 400 $ 400,000 $ 440,000 $ 520,000

Y)

APR MAY JUN JUL AUG

1,500,000 1,800,000 2,200,000 2,500,000 2,400,000

1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
650,000 500,000 350,000 200,000 50,000
1,350,000 1,350,000 1,350,000 1,350,000 1,350,000
- - - - 100,000
2,000,000 1,850,000 1,700,000 1,550,000 1,500,000
500,000 350,000 200,000 50,000 -
$ 202,500 $ 202,500 $ 202,500 $ 202,500 $ 202,500
$ - $ - $ - $ - $ 20,000
$ 12,500 $ 8,750 $ 5,000 $ 1,250 $ -
$ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
$ 290,000 $ 286,250 $ 282,500 $ 278,750 $ 297,500

$ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000

 SEP OCT NOV DEC

2,000,000 1,600,000 1,200,000 800,000

1,500,000 1,500,000 1,200,000 800,000
- - - 150,000
1,350,000 1,350,000 1,350,000 1,350,000
150,000 150,000 - -
1,500,000 1,500,000 1,350,000 1,500,000
- - 150,000 700,000
$ 202,500 $ 202,500 $ 202,500 $ 202,500 $ 2,430,000
$ 30,000 $ 30,000 $ - $ - $ 80,000
$ - $ - $ 3,750 $ 17,500 $ 88,750
$ 75,000 $ 75,000 $ 60,000 $ 40,000 $ 795,000
$ 307,500 $ 307,500 $ 266,250 $ 260,000 $ 3,400,750

$ 600,000 $ 600,000 $ 480,000 $ 320,000 $ 6,360,000

LEVEL STRATEGY (CONSTANT WORK FORCE, VARYING INVENTORY)
Maximize Inventory Capacity by Maximize Overtime in Early Year

Average Actual Demand / Month 1,325,000

Shipping Limitation 1,500,000
Average Worker / Month 27
Additional Worker 7
Hiring Cost $ 7,000

Cost / 1000 JAN FEB MAR

board feet

Demand 1,000,000 1,100,000 1,300,000

Shipping 1,000,000 1,100,000 1,300,000
Beginning Inventory - 350,000 600,000
Regular Production 50,000 1,350,000 1,350,000 1,350,000
Overtime Production - - -
Total Available Product 1,350,000 1,700,000 1,950,000
Ending Inventory 350,000 600,000 650,000
Regular Production Cost $ 150 $ 202,500 $ 202,500 $ 202,500
Overtime Production Cost $ 200 $ - $ - $ -
Holding Cost $ 25 $ 8,750 $ 15,000 $ 16,250
Shipping cost $ 50 $ 50,000 $ 55,000 $ 65,000
TOTAL COST $ 261,250 $ 272,500 $ 283,750

US SPOT MARKET $ 400 $ 400,000 $ 440,000 $ 520,000

Y)

APR MAY JUN JUL AUG

1,500,000 1,800,000 2,200,000 2,500,000 2,400,000

1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
650,000 500,000 350,000 200,000 50,000
1,350,000 1,350,000 1,350,000 1,350,000 1,350,000
- - - - 100,000
2,000,000 1,850,000 1,700,000 1,550,000 1,500,000
500,000 350,000 200,000 50,000 -
$ 202,500 $ 202,500 $ 202,500 $ 202,500 $ 202,500
$ - $ - $ - $ - $ 20,000
$ 12,500 $ 8,750 $ 5,000 $ 1,250 $ -
$ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
$ 290,000 $ 286,250 $ 282,500 $ 278,750 $ 297,500

$ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000

 SEP OCT NOV DEC

2,000,000 1,600,000 1,200,000 800,000

1,500,000 1,500,000 1,200,000 800,000
- - - 150,000
1,350,000 1,350,000 1,350,000 1,350,000
150,000 150,000 - -
1,500,000 1,500,000 1,350,000 1,500,000
- - 150,000 700,000
$ 202,500 $ 202,500 $ 202,500 $ 202,500 $ 2,430,000
$ 30,000 $ 30,000 $ - $ - $ 80,000
$ - $ - $ 3,750 $ 17,500 $ 88,750
$ 75,000 $ 75,000 $ 60,000 $ 40,000 $ 795,000
$ 307,500 $ 307,500 $ 266,250 $ 260,000 $ 3,400,750

$ 600,000 $ 600,000 $ 480,000 $ 320,000 $ 6,360,000

MIXED STRATEGY (VARYING INVENTORY, VARYING WORK FORCE)

Beginning Worker 20
New Hire Cost $ -

Cost / 1000
board feet JAN FEB

Demand 1,000,000 1,100,000

Worker 20 20
Beginning Inventory - -
Estimated

Regular Production 50,000 1,000,000 1,000,000

Overtime 25%
Shortage / Surplus - (100,000)
Additional / Layoff Workers 50,000 - 2
Worker 20 22
Beginning Inventory - -
Regular Production 50,000 1,000,000 1,100,000
Production Cost $ 150 $ 150,000 $ 165,000
Overtime Production
Overtime Production Cost $ 200 $ - $ -
Actual

Surplus - -
Holding Cost $ 25 $ - $ -
Hiring cost / new employee $ 1,000 $ - $ 2,000
Layoff cost / employee $ 500 $ - $ -
Shipping cost $ 50 $ 50,000 $ 55,000
TOTAL COST $ 200,000 $ 222,000

US SPOT MARKET $ 400 $ 400,000 $ 440,000

K FORCE)

MAR APR MAY JUN JUL

1,300,000 1,500,000 1,800,000 2,200,000 2,500,000

22 26 30 36 44
- - - - -
1,100,000 1,300,000 1,500,000 1,800,000 2,200,000

(200,000) (200,000) (300,000) (400,000) (300,000)

4 4 6 8 6
26 30 36 44 50
- - - - -
1,300,000 1,500,000 1,800,000 2,200,000 2,500,000
$ 195,000 $ 225,000 $ 270,000 $ 330,000 $ 375,000

$ - $ - $ - $ - $ -
- - - - -
$ - $ - $ - $ - $ -
$ 4,000 $ 4,000 $ 6,000 $ 8,000 $ 6,000
$ - $ - $ - $ - $ -
$ 65,000 $ 75,000 $ 90,000 $ 110,000 $ 125,000
$ 264,000 $ 304,000 $ 366,000 $ 448,000 $ 506,000

$ 520,000 $ 600,000 $ 720,000 $ 880,000 $ 1,000,000

 AUG SEP OCT NOV DEC

2,400,000 2,000,000 1,600,000 1,200,000 800,000

50 48 40 32 24
- - - - -
2,500,000 2,400,000 2,000,000 1,600,000 1,200,000

100,000 400,000 400,000 400,000 400,000

(2) (8) (8) (8) (8)
48 40 32 24 16
- - - - -
2,400,000 2,000,000 1,600,000 1,200,000 800,000
$ 360,000 $ 300,000 $ 240,000 $ 180,000 $ 120,000

$ - $ - $ - $ - $ -
- - - - -
$ - $ - $ - $ - $ -
$ - $ - $ - $ - $ -
$ 1,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000
$ 120,000 $ 100,000 $ 80,000 $ 60,000 $ 40,000
$ 481,000 $ 404,000 $ 324,000 $ 244,000 $ 164,000

$ 960,000 $ 800,000 $ 640,000 $ 480,000 $ 320,000

$ 2,910,000.0

$ -

$ -
$ 30,000.0
$ 17,000.0
$ 970,000.0
$ 3,927,000.0

$ 7,760,000