The United States Plywood Industry - Systems Study

Abstract

The U. S. plywood industry is analyzed as a feedback system and simulated on a large-scale digital computer. An industry of thousands of interacting firms is approximately represented by a model of seven interacting sectors by grouping together firms which tend to behave homogeneously in response to the same input variables. The seven sectors include two producing sectors representing, in the aggregate, independent mills of the industry and mills integrated in their organization with wholesale warehouses. Three wholesale sectors represent aggregations of independent jobbers, jobbers integrated organizationally with producers, and office wholesalers who hold no physical inventory. Two retail sectors represent, in the aggregate, retailers and users who buy in box-car-load lots and those who buy in less than box-car-load lots. Description of the independent mill and independent jobber sectors are presented in some detail because of the key role these firms play in the determination of market price. The market price mechanism is discussed along with the method employed to represent, in the aggregate, the information and material handling lags in the system. Preliminary tests of the simulation model are compared with industry data.