Granite Forest Products
LOG Division
Interoffice Memorandum
To:
Wood Procurement Manager
From:
Saba Vahid
Date:
9 February, 2016
Subject: Log Sales
We have three cut blocks that are available to supply our log sales. Logs can be sold as
pulp, sawlogs or export logs and each market is limited by maximum customer demand.
We want to know how much we should harvest from each cut block to maximize profit. The
Lab1 spreadsheet contains three worksheets: 1) Data, 2) LPMatrix, and 3) Graphs. In the
Data worksheet you will find data summarizing log distributions for each block, the total
volume available at each block, log recovery data by small end diameter (sed), harvest
costs, log prices and customer demand. In the LPMatrix worksheet you will find a partially
completed LP matrix. Your assignment is to complete this matrix and find the optimal LP
solution using Solver.
Important: You need to copy the necessary data from the Data worksheet to the LPMatrix
worksheet. This ensures that the only place you can change data is in the Data worksheet.
DO NOT ENTER OR CHANGE DATA IN LPMatrix.
In LPMatrix you will need to:
1. add the objective row (pay attention to + and – values)
2. add UB’s for cut block volumes and customer demand
3. complete the material balance constraints
4. add sumproduct equations for constraint use and objective function value
5. setup Solver to find the optimal LP solution.
Questions:
1. What is the optimal solution?
2. Does this solution make sense in terms of the logging costs, cruise data and
recovery factors?
3. What constraints are binding? (a binding constraints is one that is stopping the
optimal solution from improving any further)
4. What happens when you relax these constraints by increasing their UB’s (do each
one independently)?
5. Look at the graphs worksheet to see how the optimal solution can be reported in
tables and graphs.
Marking: When you have completed your model and answered the questions, have the
instructor or the TA check it and mark you as having completed the assignment.