United States 

Department of 

Agriculture System 6: A Pricing Strategy 

Forest Service for Long Blanks 

Northeastern Forest 

Experiment Station Hugh W. Reynolds 

Research Paper 

N E-573 

Bruce G. Hansen 
The Authors 

Hugh W. Reynolds received a B.S. degree in electrical engineering 

from the University of Minnesota in 1950. For the past 20 years he has been 

engaged in research on the utilization of low-grade hardwoods at the Northeastern Forest Experiment Station, Forestry Sciences Laboratory, 

Princeton, West Virginia. 

Bruce G. Hansen, economist, received a B.S. degree in economics 

from Concord College at Athens, West Virginia, in 1968, and an M.B.A. 

degree from Virginia Polytechnic Institute and State University in 1978. 

Manuscript received for publication 25 April 1985 

Abstract 

In System 6, small-diameter, low-grade hardwood timber is used to 

make blanks in standard sizes. Blanks are made in one thickness and one 

quality class but in all the standard lengths during each production run. 

The quantity of blanks per length can be varied, while keeping total yield 

high, by using proper production control techniques. However, when the 

percentage of long blanks is increased beyond 15 percent, yields of 

required blanks will drop-though total yields remain constant-and earnings will be lowered. We describe a procedure that can be used to keep 

constant or improve earnings when the demand for long blanks exceeds 

the 15-percent level. 

The use of trade, firm, or corporation names in this publication is for 

the information and convenience of the reader. Such use does not constitute an official endorsement or approval by the U.S. Department of Agriculture or the Forest Service of any product or service to the exclusion of 

others that may be suitable. 

The computer program described in this publication is available on 

request with the understanding that the US. Department of Agriculture 

cannot assure its accuracy, completeness, reliability, or suitability for any 

other purpose than that reported. The recipient may not assert any proprietary rights thereto nor represent it to anyone as other than a Governmentproduced computer program. 
Introduction In System 6, small-diameter, low-grade hardwood timber is bucked to 

6- or 8-foot bolts; each bolt is sawed to two cants; the cants are resawed to 

boards; the boards are kiln dried; and the kiln-dried boards are made to 

blanks. The marketing aspects of System 6 and blanks are explained by 

Reynolds and Gatchell (1979). The System 6 technology is discussed by 

Reynolds and Gatchell (1982) and a sample plant design is available 

(Reynolds and Hansen 1984). The economics of using System 6 to make 

standard-size blanks is explained by Hansen and Reynolds (1984). The 

derivation of the standard blank sizes is discussed by Araman and others 

(1982). Operating methods used in the System 6 rough mill to convert the 

kiln-dried boards to specific quantities of blanks are explained by Reynolds 

(1 984). 

We have obtained good yields of blanks with System 6 technology 

using small-diameter, low-grade hardwoods. Yield is affected by timber 

quality and by the quantity of blanks needed in each length. The standard 

blank sizes are shown in Table 1. In general, blank yields are high enough 

to give good profits when the demand for blanks 50 inches and longer 

("long blanks") does not exceed 15 percent of the square-foot area in any 

Table 1.-Hardwood blank standard sizes for furniture and cabinet 

manufacturers, in inches 

Intended 

Nominal product Actual 

thick- finish blank 

ness thick- thickness ness 

Blank length 

Clear QualityM6-Inch-Wide Blanks 

18 22 26 31 36 42 

22 25 29 31 35 41 47 58 86 

25 29 33 38 45 50 60 75 100 

25 29 33 38 45 50 60 75 100 

25 28 32 35 40 45 50 60 70 85 

25 28 32 35 40 45 50 60 70 90 

Core Qualityl26-Inch-Wide Blanks 

23 26 29 34 40 50 60 70 95 

23 26 29 34 40 50 60 70 85 

Sound Qualityl20-Inch-Wide Blanksa 

22 24 27 29 33 44 54 70 80 100 

23 25 28 33 45 55 65 80 90 100 

24 28 31 34 40 

21 24 28 30 34 

Sound QualityMO-Inch-Wide Blanksb 

25 29 34 40 50 60 70. 95 

a For upholstery frames. 

b For case goods. 
Operating 

Procedures 

one production run. Small-diameter, low-grade timber that does not yield 

15-percent long blanks is generally considered too poor to be used in 

System 6. By contrast, better than average timber can support production 

runs with demands greater than 15-percent long blanks. 

Demand for long blanks, expressed as a percentage of the industry's 

total demand for blanks, is 21 for solid wood furniture, 28 for veneered 

furniture, and 13 for kitchen cabinets (Araman et al. 7982). Consequently, 

some orders for blanks will exceed 15-percent long blanks. 

Furniture, kitchen cabinet, and dimension companies that operate their 

own conventional rough mills do not have trouble making parts shorter 

than 50 inches. But they must use the highest quality, most expensive 

lumber to make longer parts. Therefore, these manufacturers would like to 

buy long blanks for cutup to long parts and make the shorter parts themselves. Blanks producers should be able to sell all the long blanks they can 

make as a lucrative sideline provided that long blanks are not priced too 

high. 

When orders for blanks are received, they are evaluated with program 

BLANKS (Araman 1983). The results of program BLANKS give the quantities of blanks per length for a given thickness and quality required in a 

production run. Cutting bills 1 through 4 (Table 2) are typical of bills where 

the requirements for long blanks are 15 percent or less. With typical 

System 6 quality timber, the yields are consistently good for these cutting 

bills. But when the need for long blanks exceeds 15 percent of the total 

square footage required, as shown in cutting bills 5 through 9, the yields in 

specified blanks drop. When yields are lower, earnings are lower. Earnings 

can be kept constant by charging extra (a surcharge) for the long blanks. 

In the following section we describe eight System 6 mill operating 

procedures that can be used to determine the surcharge when more than 

15-percent long blanks must be produced. Procedures 1 through 7 resulted 

in high surcharges and were rejected. Procedure 8 was found acceptable. 

Table 2.-414 CIF cutting bills, in percent of total square feet 

Cutting bill 

Length 

class 1 2 3 4 5 6 7 8 9 

Long 0 5 10 15 20 25 30 35 40 

(72-50 

inches) 

Medium 10 15 20 25 30 35 40 45 50 

(49-32 

inches) 

Short 50 45 40 35 30 25 20 15 10 

(31 -21 

inches) 

Salvage 40 35 30 25 20 15 10 5 0 

(20 inches 

or less) 
Procedure 1: Normal Operations 

When no special modifications to the System 6 operations are made, 

yields are good for cutting bills 1 through 4. As demand for long blanks 

increases (cutting bills 5 through 9), yields in the blanks required decrease. 

The decrease in revenues caused by the decrease in required blanks could 

be made up by a surcharge for the long blanks. But to keep return on 

investment (ROI) constant, such surcharges would need to range from 50 to 

170 percent of the normal blanks price. 

Procedure 2: Two-Blank Quality 

In this procedure we sorted System 6 kiln-dried boards into two quality 

classes. Boards graded No. 3A Common and Better were used to make 

clear-quality blanks. The remainder was used to make frame-quality blanks. 

The yield of frame-quality blanks was good (Reynolds and Araman 1983), 

but the value of frame blanks was considerably lower than clear-one-face 

(CIF) blanks. Consequently, for cutting bills 5 through 9, the yield of clear 

blanks from the better boards was not high enough to offset the lower 

earnings of the frame blanks. Surcharges ranging from 50 to 170 percent of 

the normal blanks price were needed for the long, clear blanks to bring 

earnings to the required level. 

Procedure 3: Better Cants 

Not all small-diameter, low-grade timber suitable for System 6 is of the 

same quality. Quality varies between sites. Would it be practical to save the 

cants made from better quality timber to be used when more long blanks 

are required? Sorting and saving would increase costs and might entice 

timber managers to charge more for better wood. Using data from a study 

with black cherry (Reynolds and Hansen, in press), we compared "normal" 

quality cherry cants with "better" quality cherry cants. We added 15 percent to the cost of better cherry cants. The higher yields of blanks from the 

better cants using cutting bills 5 through 9 did not offset the higher cant 

cost. Surcharges for long blanks ranging from 25 to 135 percent were 

required to bring earnings to the required level. 

Procedure 4: Sell Everything 

System 6 rough-mill operations are preplanned so that only those 

blanks required by the cutting bill are made (Reynolds 1984). We can 

achieve this with "normal" System 6 quality timber when the percentage of 

long blanks is 15 percent or less. When a cutting bill requires more than 15- 

percent long blanks, the System 6 techniques require more wood to be 

processed. One result of this additional processing is blanks in the shorter 

lengths being produced in excess of the cutting bill requirements. There is 

no market for these excess blanks at standard prices. 

Procedure 4 calls for generating additional demand by discounting the 

prices of the excess shorter length blanks. By this process, new markets 

might be found. If we price discount the excess blanks shorter than 50 

inches but longer than 20 inches by 25 percent, and price discount the 20- 

inch and shorter blanks by 50 percent, additional revenues are earned. This 

extra money does not eliminate the necessity for long-blank surcharges. It 

does, however, lower the required surcharges to a range of 25 to 50 percent. So the Procedure 4 is better than the first three, but is still not 

acceptable. 
Procedure 5: Chips and Blanks 

In Procedure 3, we considered buying better quality timber for use 

when cutting bills with more than 15-percent long blanks are used. Another 

way to improve the quality of the kiln-dried boards going through the rough 

mill is to chip some of the poorest boards as they leave the cant gang 

resaw. Then more cants will have to be purchased to make enough of the 

kiln-dried boards to keep the rough mill busy. Sales of the chips from the 

poorest green boards partially offset the cost of additional cants. Chip 

values are only about half the cant cost. 

This procedure works well if you can buy additional cants at the 

regular cant price and if the quality of the additional cants is as good as or 

better than the quality of the regular cants. The better board quality, when 

30 percent of the green boards are chipped, results in higher total yields 

and a higher percentage of long blanks. Cutting bills with up to 25-percent 

long blanks now can be accommodated without a long-blank surcharge. 

Surcharges of 33 to 103 percent are required when cutting bills (7 through 

9) calling for more than 25-percent long blanks are used. 

We then examined three possible combinations of these operating 

approaches: 

Procedure 6: Combination of Procedures 2 and 4 

Surprisingly, this combination does not work. Required long-blank surcharges range from 50 to 89 percent. These are greater than the surcharges 

with Procedure 4 alone. 

Procedure 7: Combination of Procedures 3 and 4 

This combination also does not work well. Surcharges range from 10 to 

45 percent, which is no better than the Procedure 4 alone. 

Procedure 8: Combination of Procedures 4 and 5 

Improving kiln-dried board quality by chipping the worst of the green 

boards, buying additional cants at the regular price, selling chips, and selling all of the extra blanks at discount prices will nearly eliminate the need 

for a long blank surcharge. When 30 percent of the green boards were 

chipped, or when additional cants were bought at regular prices, or when 

chips were sold for 50 percent of the cant cost, or when extra blanks less 

than 50 inches long but more than 20 inches long were sold at 25-percent 

discount, or when the excess blanks 20 inches and shorter were sold at 50- 

percent discount, there was no surcharge needed until demand for long 

blanks rose to 35 percent. A surcharge of 6 percent was needed for cutting 

bill No. 8 and 18 percent for cutting bill No. 9. 

Since this relatively complex procedure is the best one and since the 

combination of factors can change over wide ranges, we wrote a computer 

program to assist in determining the surcharge required. 
Using Program Program LOBLS1 is written in BASICA for use on the IBM-PC. The 

LOBLSI two-diskette model with 256K memory and matrix printer is assumed. To 

start, we suggest the user format a diskette using the Is option. Then copy 

the MSDOS diskette files onto this diskette. We used COMMAND.COM, 

ANSI.SYS, PRINT.COM, ASSIGN.COM, FIND.EXE, and BASICA.COM. Then 

copy the program listed in the Appendix and save it on this diskette. Now 

format a second diskette without the Is option. Put the first diskette in 

drive A and the second diskette in drive B to be used as a scratch file. 

The program runs by first calling data from the B drive as the 

"B:LOBLSl.DAT" file. Since this file will not exist on the B drive diskette 

for the first run, use the following procedure to set up the file: 

Load the program as "A:LOBLSI.BAS" 

Erase lines 70, 80, and 90 by entering 70-return, 80-return, 90-return. 

Enter RUN and the data input listing on the screen will show all values 

as zeros. 

Following the prompt line, enter dummy values in all 12 data lines. We 

suggest using the input data values given in the demonstration printout 

Enter 13,13 to continue the program 

When the program is completed, the "B:LOBLSI.DAT" file will have been 

created. 

0 Load the program again as "A:LOBLSl.BAS" and lines 70,80, and 90 will 

be in the computer memory. 

The data used in these demonstration runs were obtained in the black 

cherry study cited earlier (Reynolds and Hansen, in press). Yield data for 

the typical quality cherry small-diameter, low-grade timber are shown in 

Table 3. When 30 percent of the green boards were chipped and additional 

cants were bought to replace these boards, the yield data are as shown in 

Table 4. 

Table 3.-414 CIF long-blank yields from typical quality cherry boards, 

in percent of blank output 

Yield 

Cutting Required Extra Excess salvage Total 

bill blanks blanksa blanksb 

1 44.6 0.0 0.0 44.6 

2 45.2 0.0 0.0 45.2 

3 45.5 0.0 0.0 45.5 

4 46.4 0.0 0.0 46.4 

5 37.4 1.3 8.6 47.3 

6 40.2 4.5 2.5 47.2 

7 34.4 7.2 5.0 46.6 

8 30.4 9.2 7.1 46.7 

9 27.0 11.3 8.4 46.7 - 

a 45 to 21 inches long made but not required. 

18 to 15 inches long made but not required. 
Table 4.-414 C1F long-blank yields from typical quality cherry boards 

with 30 percent of the boards chipped, in percent of blank output 

Yield 

Cutting Required Extra Excess salvage Total 

billa blanks blanksb blanksC 

a Cutting bills 1 through 4 not considered. b 45 to 21 inches long made but not required. c 18 to 15 inches long made but not required. 

In demonstration run No. 1, the input data are: 

$15,840 per shift is required for the cash flow in. 

When cutting bill No. 8 (Table 4) was used, there was a 35.9-percent 

yield of required blanks. 

There was an additional 8.8-percent yield of blanks shorter than 50 

inches but longer than 20 inches. 

There was an additional 6.6-percent yield of blanks 20 inches or 

shorter. 

The blanks required by the cutting bill, item 2, will sell for $2.20 per 

square foot. 

The extra blanks, item 3, will sell for $1.65 per square foot. 

The excess salvage blanks, item 4, will sell for $1.10 per square foot. 

Cutting bill No. 8 calls for 35 percent of all blanks to be 50 inches or 

longer. 

Thirty percent of all green boards, the poorest boards, will be sent to 

the chipper. 

Cant cost is $180 per thousand board feet (Mbf), free on board (f.0.b.) 

the System 6 mill, and will not change as more cants are purchased. 

11. Chips are worth $13.25 per green ton f.0.b. the System 6 mill. 

12. There will be 16.0 Mbf of kiln-dried boards input per shift to the System 

6 mill. 
In demonstration run No. 1 (Fig. 1) the output values are: 

There were 5,744 square feet of required blanks made (35.9 percent of 

16,000 board-foot input), which brought in $12,637 at $2.20 per square 

foot. 

LONG BLANKS SURCHARGE Program 1 03-07-1985 

Poorest boards chipped; all blanks sold 15:08:33 

Input Data 

1 Cash flow reqld= $15,840.00 7 Exc salv blanks price= $ 1.10 

2 Reqld blanks yield= 35.9% 8 Percent long blanks= 35.0% 

3 Extra blanks yield= 8.8% 9 Percent boards chipped= 30.0% 

4 Exc salv blanks yield= 6.6% 10 Cant cost= $180.00/mbf 

5 Req'd blanks price $ 2.20 11 Chip price= $ 13.25/ton 

6 Extra blanks price $ 1.65 12 Board input per shift 16.00mbf 

RUN 1DENT:DEMONSTRATION #1 

j Output Values i Required bl anks made= 5,744sqft Val ue $12,637 

I Extra blanks made= lr408sqft Value $ 2,323 

Exc sal blanks made= lr056sqft Value $ 1,162 

Chips made= 12.00tons Value $ 159 

Total cash flow in $16,281 

Additional cants for chips= 4.80mbf Value $ 864 

Cash flow in defecit: earn from surcharge =$ 423 

I Long blanks made= 2,010sqft Value $ 4,423 Cash flow in reqld from long blanks $ 4,846 

Long blanks price= $ 2.41/sqft Long blanks surcharge= $ O.Zl/sqft 

Figure 1.-Program LONG BLANKS SURCHARGE output: 

Demonstration run No. 1. 
There were 1,408 square feet of extra blanks made (8.8 percent of 16,000 

board-foot input), which brought in $2,323 at $1.65 per square foot. 

0 There were 1,056 square feet of excess salvage blanks made (6.6 percent 

of 16,000 board-foot input), which brought in $1,162 at $1.10 per square 

foot. 

0 Twelve tons of green chips were made (30 percent of 16 Mbf cant input 

at 2.5 tons per Mbf), which brought in $159 at $13.25 per ton. 

0 The total of these four items was $16,281. 

0 An additional 4.8 Mbf of cants at $180 per Mbf had to be purchased to 

make up for the boards chipped. This cost $864. 

There was $15,417 cash flow in after the additional cants were paid for 

($16,281 - $864 = $15,417). The cash flow in required was $15,840 but 

only $15,417 was brought in, creating a $423 deficit ($15,840 - $15,417 

= $423). 

0 There were 2,010 square feet of long blanks made (35 percent of 5,744 

square feet of required blanks) valued at $4,423 (2,010 x $2.20 = $4,422). 

The deficit would have to be made up from the sale of long blanks. A 

$423 deficit added to the $4,422 long blank value means that $4,846 ($423 

+ $4,422 = $4,846) needs to be earned by the sale of long blanks. 

The 2,010 square feet of long blanks must be sold for $2.41 per square 

foot ($4,84512,010 = $2.41). The long-blanks' surcharge will be $0.21 per 

square foot. 

If no boards had been chipped (input 9 = O), the yields would have been 

30.4 percent for required blanks (Input 2= 30.4), 9.2 percent for extra blanks 

(Input 3 = 9.2), and 7.1 percent for excess salvage blanks (Input 4= 7.1). 

These data are shown in Table 3. The surcharge would have been $0.86 per 

square foot, as shown in demonstration run No. 2 (Fig. 2). 

When we use cutting bill 6 and chip 30 percent of the green boards, 

the yields are 46.9 percent for required blanks, 3.4 percent for extra blanks, 

and 1.9 percent for excess salvage blanks (Table 4). As shown in demonstration run No. 3 (Fig. 3), there is a negative surcharge. This means that if 

we charge the regular prices, there will be an additional cash flow in of 

$1,196. 
LONG BLANKS SURCHARGE Program 1 

Poorest boards chipped; all blanks sold 

Input Data 

1 Cash flow reqld= $15,840.00 7 Exc salv blanks price= $ 1.10 

2 Req'd blanks yield= 30.4% 8 Percent long blanks= 35.0% 

3 Extra blanks yield- 9.2% 9 Percent boards chipped= 0.0% 

4 Exc salv blanks yield= 7.1% 10 Cant cost= $180.00/mbf 

5 Reqld blanks price $ 2.20 11 Chip price= $ 13.25/ton 

6 Extra blanks price $ 1.65 12 Board input per shift 16.00mbf 

RUN 1DENT:DEMONSTRATION 2 

Output Values 

Required blanks made= 4,864sqft Val ue $10,701 I Extra blanks made= l~472sqft Value $ 2,429 

I Exc sal blanks made= l~136sqft Value $ 1,250 

i Chips made= 0.OOtons Value $ 0 

I Total cash flow in $149379 

I Additional cants for chips= 0.OOmbf Value $ 0 

Cash flow in defecit: earn from surcharge = $ 1,461 

I Long blanks made= 1,702sqft Value $ 3,745 I Cash flow in reqld from long blanks $ 5,206 

I Long blanks price= $ 3.06/sqft Long blanks surcharge= $ 0.86/sqft 

Figure 2.-Program LONG BLANKS SURCHARGE output: Demonstration run No. 2. 

LONG BLANKS SURCHARGE Program 1 

I Poorest boards chipped; a11 blanks sold 15:10:35 

Input Data 

1 1 Cash flow reqld= $15,840.00 7 Exc salv blanks price= $ 1.10 

2 Req'd blanks yield= 46.9% 8 Percent long blanks= 25.0% I 3 Extra blanks yield= 3.4% 9 Percent boards chipped= 30.0% 

4 Exc salv blanks yield= 1.9% 10 Cant cost= $180.00/mbf 

5 Reqld blanks price $ 2.20 11 Chip price= $ 13.25/ton 

! 6 Extra blanks price $ 1.65 12 Board input per shift 16.00mbf 

RUN 1DENT:DEMONSTRATION #3 

Output Values 

Required blanks made= 7,504sqft Val ue $16,509 

Extra blanks made= 544sqft Value $ 898 

Exc sal blanks made= 304sqft Value $ 334 

Chips made= 12.00tons Value $ 159 

Total cash flow in $17, 900 

Additional cants for chips= 4.80mbf Value $ 864 

Cash flow in defecit: earn from surcharge = $-1,196 

Long blanks made= 1,876sqft Value $ 4,127 

Cash flow in reqld from long blanks $ 2,931 

Long blanks price= $ 1.56/sqft Long blanks surcharge= $-0.64/sqft 

Figure 3.-Program LONG BLANKS SURCHARGE output: 

Demonstration run No. 3. 
Conclusions A System 6 blanks manufacturer may need to make large quantities of 

long blanks. Or an opportunity may arise where a blanks customer is 

willing to pay a premium price for long blanks. Operating the System 6 

business as usual to make the additional long blanks will not be practical. 

By chipping the poorest boards and by selling the extra short blanks at 

reduced prices, the making of additional long blanks is practical and could 

be very lucrative. 

When furniture and kitchen cabinet manufacturers are willing to pay 

surcharges for long blanks, when more cants are available, and when the 

extra chips and blanks can be sold at reduced prices, the System 6 mill can 

be operated at greater profit. The System 6 mill manager should have the 

long-blank surcharge program "LOBLS1.BAS" on the mill ISM-PC so these 

additional profit opportunities can be seized. 

The only other option is to operate the standard mill at a reduced ROI 

because of lower returns. 

Literature Cited Araman, Philip A. BLANKS: A computer program for analyzing furniture 

rough-part needs in standard-size blanks. Res. Pap. NE-521. Broomall, 

PA: U.S. Department of Agriculture, Forest Service, Northeastern Forest 

Experiment Station; 1983. 8 p. 

Araman, Philip A.; Gatchell, Charles J.; Reynolds, Hugh W. Meeting the 

solid wood needs of the furniture and kitchen cabinet industries: 

standard4ze hardwood blanks. Res. Pap. NE-494. Broomall, PA: US. 

Department of Agriculture, Forest Service, Northeastern Forest Experiment Station; 1982.27 p. 

Hansen, Bruce G.; Reynolds, Hugh W. System 6 alternatives: An economic 

analysis. Res. Pap. NE-551. Broomall, PA: U.S. Department of Agriculture, Forest Service, Northeastern Forest Experiment Station; 1984. 14 p. 

Reynolds, Hugh W. System 6: Rough mill operating manual. Res. Pap. 

NE-542. Broomall, PA: U.S. Department of Agriculture, Forest Service, 

Northeastern Forest Experiment Station; 1984. 27 p. 

Reynolds, Hugh W.; Araman, Philip A. System 6: Making frame-quality 

blanks from white oak thinnings. Res. Pap. NE-520. Broomall, PA: U.S. 

Department of Agriculture, Forest Service, Northeastern Forest Experiment Station; 1983. 9 p. 

Reynolds, Hugh W.; Gatchell, Charles J. Marketing low-grade hardwoods for 

furniture stock-a new approach. Res. Pap. NE-444. Broomall, PA: US. 

Department of Agriculture, Forest Service, Northeastern Forest 

Experiment Station; 1979. 7 p. 

Reynolds, Hugh W.; Gatchell, Charles J. New technology for low-grade 

hardwood utilization: System 6. Res. Pap. NE-504. Broomall, PA: U.S. 

Department of Agriculture, Forest Service, Northeastern Forest 

Experiment Station; 1982. 8 p. 

Reynolds, Hugh W.; Hansen, Bruce G. A sample plant design for System 6. 

Gen. Tech. Rep. NE-87. Broomall, PA: U.S. Department of Agriculture, 

Forest Service, Northeastern Forest Experiment Station; 1984. 8 p. 

Reynolds, Hugh W.; Hansen, Bruce G. Making black cherry blanks using 

System 6. Res. Pap. Broomall, PA: U.S. Department of Agriculture, Forest 

Service, Northeastern Forest Experiment Station; [in press]. 
Appendix I Computer Program to Determine Long-Blank Surcharge 

10 REM This program will calculate the long blanks surcharge needed to meet the 

20 REM required cash flow per shift. It is written in BASICA for the IBM PC. It 

30 REM saved as l1A:LOBLS1.BASl1. 

40 CLS 

50 KEY OFF 

60 DEFINT N 

70 OPEN llB:LOBLS1.DAT1l FOR INPUT AS #1 

80 INPUT #lr CFIRrYRBrYEBrYESBrRBPrEBPrESBPrPLB,PBCrCCrCPsBIPS 

90 CLOSE #1 

100 N=O 

110 IDl$=ll 1 Cash flow reqfd= $##r###.##" 

120 ID2$=lv 2 Reqld blanks yield= ##.#Xl1 

130 ID3$=11 3 Extra blanks yield= ##.I%" 

140 ID4$=11 4 Exc salv blanks yield= ##.#%!I 

150 ID5$=11 5 Reqld blanks price $##. ##11 

160 ID6$=11 6 Extra blanks price $##. ##I1 

170 ID7$=11 7 Exc salv blanks price= $##.##ll 

180 ID8$=11 8 Percent long blanks= I#.#%" 

190 ID9$=" 9 Percent boards chipped= ##.#XI1 

200 ID1O$=ll 10 Cant cost= $###. ##/mbf l1 

210 ID1l$=ll 11 Chip price= $###. ##/tont1 

220 1D12$=" 12 Board input per shift ##.##mbfl1 

230 CLS 

240 PRINT: PRINT: 

250 PRINT TAB(10) "LONG BLANKS SURCHARGE Program 1": PRINT 

260 PRINT "Poorest boards chipped; all blanks soldt1: PRINT 

270 PRINT TAB(15) llInput Dataw 

280 PRINT USING IDl$; CFIR 

290 PRINT USING ID28; YRB 

300 PRINT USING ID38; YEB 

310 PRINT USING ID4b; YESB 

320 PRINT USING ID5$; RBP 

330 PRINT USING ID6$; EBP 

340 PRINT USING ID7$; ESBP 

350 PRINT USING ID88; PLB 

360 PRINT USING ID9b; PBC 

370 PRINT USING ID10$; CC 

380 PRINT USING IDll$; CP 

390 PRINT USING IDlZS; BIPS 

400 PRINT 13 To solve using this data enter 13,1311: PRINT 

410 INPUT "ENTER NUMBER AND DATA VALUE FOR CHANGES"; NIDUM 

420 IF N=l THEN CFIR=DUM ELSE 440 

430 GOT0 410 

440 IF N=2 THEN YRB=DUM ELSE 460 

450 GOT0 410 

460 IF N=3 THEN YEB=DUM ELSE 480 

470 GOT0 410 

480 IF N=4 THEN YESB=DUM ELSE 500 

490 GOT0 410 

500 IF N=5 THEN RBP=DUM ELSE 520 
510 GOT0 410 

520 IF N=6 THEN EBP=DUM ELSE 540 

530 GOT0 410 

540 IF N=7 THEN ESBP=DUM ELSE 560 

550 GOT0 410 

560 IF N=8 THEN PLB=DUM ELSE 580 

570 GOT0 410 

580 IF N=9 THEN PBC-DUM ELSE 600 

590 GOT0 410 

600 IF N=10 THEN CC-DUM ELSE 620 

610 GOT0 410 

620 IF N=ll THEN CP-DUM ELSE 640 

630 GOT0 410 

640 IF N=12 THEN BIPS=DUM ELSE 660 

650 GOT0 410 

660 IF N>12 GOT0 670 

670 OPEN "B:LOBLS1.DATM FOR OUTPUT AS #1 

680 PRINT #l, CF1R;YRB;YEB;YESB;RBP;EBP;ESBP;PLB;PBC;CC;CP;BIPS 

690 CLOSE #l 

700 RBM=BIPS*1000*(YRB/100) 

710 EBM=BIPS*lOOO*(YEB/100) 

720 ESBM=BIPS*1000*(YESB/100) 

730 CFIC=CP*2.5*BIPS*(PBC/100) 

740 CFIRB=RBM*RBP 

750 CFIEB=EBM*EBP 

760 CFIESB=ESBM*ESBP 

770 TCFI=CFIRB+CFIEB+CFIESB+CFIC 

780 CFOAB=BIPS*(PBC/lOO)*CC 

790 CFDzCFIR-TCFI+CFOAB 

800 LBM=RBM*(PLB/lOO) 

810 LBV=LBM*RBP 

820 CFRLB=LBV+CFD 

830 LBP=CFRLB/LBM 

840 LBSzLBP-RBP 

850 TCM=BIPS*(PBC/100)*2.5 

860 ABR=BIPS*(PBC/lOO) 

870 D$=DATE$: T$=TIME$ 

880 OD1$=ll Required blanks made= ##, ###sqftW 

890 OD2$=l1 Value $##,###" 

900 OD21$=" Val ue $##, ###'I 

910 OD4$=" Exc sal blanks made= ##,###sqftV 

920 OD3$=11 Extra blanks made= ##, ###sqftn 

930 OD5$=" Chips made= ##.##tonsn 

940 OD6$=11 Total cash flow in 

950 OD7$=11 Cash flow in defecit: earn from surcharge 

960 OD8$=" Cash flow in req'd from long blanks 

970 OD9$=VV Additional cants for chips= ##.##mbfn 

980 ODlO$=" Long b1 anks made= ##, ###sqftW 

990 ODll$=" Long blanks price= $##.##/sqftw 

1000 OD12$=fl Long blanks surcharge= b##.##/sqftn 
1010 CLS 

1020 PRINT 

1030 PRINT TAB(20) "LONG BLANKS SURCHARGE Program 1"; 

1040 PRINT TAB(65) D$ 

1050 PRINT TAB( 15) 19Poorest boards chipped; a1 1 blanks soldw; 

1060 PRINT TAB(65) T$ 

1070 PRINT TAB(30) "Input Datan 

1080 PRINT USING IDl$; CFIR; 

1090 PRINT USING 1D7$; ESBP 

1100 PRINT USING ID2$; YRB; 

1110 PRINT USING ID8$; PLB 

1120 PRINT USING ID3$; YEB; 

1130 PRINT USING ID9$; PBC 

1140 PRINT USING ID4$; YESB; 

1150 PRINT USING ID10$; CC 

1160 PRINT USING ID5$; RBP; 

1170 PRINT USING ID11$; CP 

1180 PRINT USING ID6$; EBP; 

1190 PRINT USING ID12$; BIPS 

1200 INPUT "RUN IDENT:"; RD$ 

1210 PRINT TAB(30) nOutput Valuesw 

1220 PRINT USING OD1$; RBM; 

1230 PRINT USING OD2$; CFIRB 

1240 PRINT USING OD3$; EBM; 

1250 PRINT USING 0D2$; CFIEB 

1260 PRINT USING OD4$; ESBM; 

1270 PRINT USING OD2$; CFIESB 

1280 PRINT USING ODs$; TCM; 

1290 PRINT USING OD2$; CFIC 

1300 PRINT USING OD6$; TCFI 

1310 PRINT USING OD9$; ABR; 

1320 PRINT USING OD21$; CFOAB 

1330 PRINT USING OD7$; CFD 

1340 PRINT USING ODlO$; LBM; 

1350 PRINT USING OD21$; LBV 

1360 PRINT USING OD8f; CFRLB 

1370 PRINT USING OD11$; LBP; 

1380 PRINT USING OD12$; LBS 

1390 INPUT "ENTER 1 TO PRINT. ENTER 2 FOR NEW RUN"; NN 

1400 IF NN=1 THEN 1420 ELSE 1410 

1410 RUN 40 

1420 LPRINT: LPRINT: LPRINT 

1430 LPRINT TAB(20 "LONG BLANKS SURCHARGE Program 1"; 

1440 LPRINT TAB(65) D$ 

1450 LPRINT 

1460 LPRINT TAB(15) "Poorest boards chipped; all blanks soldn; 

1470 LPRINT TAB(65) T$ 

1480 LPRINT: LPRINT 

1490 LPRINT TAB(30) "Input DataM 

1500 LPRINT USING IDl$; CFIR; 
1510 LPRINT USING ID7$; ESBP 

1520 LPRINT USING ID2$; YRB; 

1530 LPRINT USING ID8$; PLB 

1540 LPRINT USING ID3$; YEB; 

1550 LPRINT USING ID9$; PBC 

1560 LPRINT USING ID4$; YESB; 

1570 LPRINT USING IDlO$; CC 

1580 LPRINT USING ID5$; RBP; 

1590 LPRINT USING ID11$; CP 

1600 LPRINT USING ID6$; EBP; 

1610 LPRINT USING ID12$; BIPS 

1620 LPRINT 

1630 LPRINT "RUN IDENT:"; RD$ 

1640 LPRINT 

1650 LPRINT TAB(30) tlOutput Valuesm 

1660 LPRINT USING OD1$; RBM; 

1670 LPRINT USING OD2$; CFIRB 

1680 LPRINT USING OD3$; EBM; 

1690 LPRINT USING 0D2$; CFIEB 

1700 LPRINT USING 0D4$; ESBM; 

1710 LPRINT USING OD2$; CFIESB 

1720 LPRINT USING OD5$; TCM; 

1730 LPRINT USING OD2$; CFIC 

1740 LPRINT USING OD6$; TCFI 

1750 LPRINT USING OD9$; ABR; 

1760 LPRINT USING OD21$; CFOAB 

1770 LPRINT USING 0D7$; CFD 

1780 LPRINT USING OD10$; LBM; 

1790 LPRINT USING OD21$; LBV 

1800 LPRINT USING OD8$; CFRLB 

1810 LPRINT USING OD11$; LBP; 

1820 LPRINT USING OD12$; LBS 

1830 LPRINT CHRf(l2) 

1840 GOT0 1390 

1850 END 
Reynolds, Hugh W.; Hansen, Bruce G. System 6: A pricing 

strategy for long blanks. Res. Pap. NE-573. Broomall, 

PA: U.S. Department of Agriculture, Forest Service, Northeastern Forest Experiment Station; 1986. 14 p. 

In System 6, small-diameter, low-grade hardwood timber is used to 

make blanks in standard sizes. Blanks are made in one thickness and one 

quality class but in all the standard lengths during each production run. 

The quantity of blanks per length can be varied, while keeping total yield 

high, by using proper production control techniques. However, when the 

percentage of long blanks is increased beyond 15 percent, yields of 

required blanks will drop-though total yields remain constant-and 

earnings will be lowered. We describe a procedure that can be used to 

keep constant or improve earnings when the demand for long blanks 

exceeds the 15-percent level. 

ODC 836.1: 847.112 

Keywords: Low-grade utilization; hardwood dimension 

*U.S. GOVERNMENT PRINTING OFFICE:1986-605-026:20035 
Headquarters of the Northeastern Forest Experiment Station are in 

Broomall, Pa. Field laboratories are maintained at: 

Amherst, Massachusetts, in cooperation with the University of 

Massachusetts. 

Berea, Kentucky, in cooperation with &rea College. 

Burlington, Vermont, in cooperation with the University of 

Vermont. 

Delaware, Ohio. 

Durham, New Hampshire, in cooperation with the University of 

New Hampshire. 

Hamden, Connecticut, in cooperation with Yale University. 

Morgantown, West Virginia, in cooperation with West Virginia 

University, Morgantown. 

Orono, Maine, in cooperation with the University of Maine, 

Orono. 

Parsons, West Virginia. 

Princeton, West Virginia. 

Syracuse, New York, in cooperation with the State University of 

New York College of Environmental Sciences and Forestry at 

Syracuse University, Syracuse. 

University Park, Pennsylvania, in cooperation with the 

Pennsylvania State University. 

Warren, Pennsylvania.