Ralph Butts, manager of Woodland Operations for Intergalactica Papelco’s Southeastern Region, had to decide this morning whether to approve the Bodfish Lot logging contract that was sitting on his desk. Accompanying the contract was a cruise report that gave Mr. Butts the results of a sample survey of the timber on the Bodfish Lot. Was there enough timber to make logging operations worthwhile?
The Pluto Mill of Intergalactica Papelco is located on the River Styxx in Median, Michigan. The scale of operations at Pluto is enormous. Just one of its several $500 million, football-field-long, four-story high paper machines has the capability to produce a 20-mile-long, 16-foot-wide, 20-ton reel of paper every hour. Such a machine is run nonstop 24 hours a day for as many of the 365 days in the year that mill maintenance can keep the machine running within specified quality levels. In total, the Pluto Mill produces about 400,000 tons of white paper a year.
Because it takes about a ton of wood to produce a ton of paper, a huge quantity of cordwood logs suitable for chipping and pulping must be supplied continually to keep the mill operating. Intergalactica Papelco runs a large-scale logistics, planning, and procurement operation to provide the Pluto Mill with the requisite species, quantity, and quality of wood in a timely fashion. The Pluto Mill sits on 500 acres of land in the midst of a region in which the huge Intergalactica Papelco owns over a quarter of a million acres of forest. Although this wholly owned forest is the single largest supplier of wood to the mill, more than 60% of the wood used at Pluto is purchased from independent landowners and loggers under contract.
Supplying contract wood dependably on such an enormous scale involves frequent purchasing decisions by the Intergalactica Woodlands Operations as to which independent woodlots have sufficient wood volume and quality to support economical logging operations. A prospective seller enters into a tentative agreement with Intergalactica on the basis of market price and a visual scan of the woodlot. The final decision about whether to proceed with the logging is usually based on sampling estimates of the total wood volume on the lot.
A case in point was the Bodfish Lot in Henryville, Arkansas, whose owner approached Intergalactica with a proposal for logging during the 1991 to 1992 season. Aerial photographs indicated that the land was sufficiently promising to warrant a “cruise” to estimate the total volume of wood. Estimation based on limited sampling is essential. Even for the modest-size Bodfish Lot, with 586 acres of forested land, it would be practically impossible to measure every tree on the lot. For the Bodfish Lot cruise, it was decided to sample 89 distinct 1/7-acre plots for actual measurement. Although the plots were chosen systematically, the sample was, Intergalactica hoped, still effectively “random.” Indeed, no consistent attempt was made to select the plots from areas of heavy tree growth, large-diameter trees, heavy spruce concentration, and so on. In fact, the opposite was true: The regular spacing of the sampling grid more or less guaranteed a good cross section of the entire lot. This was what is called in forestry industry jargon a “standard line plot cruise.” The total lot was 700 acres in area. The plots were spaced at 8-chain intervals apart on a rectangular grid drawn in advance at the Intergalactica Woodlands Field Office at One Rootmean Square in the town of Covariance, Illinois. The aerial photographs showed that, of the Bodfish Lot’s 700 total acres, 586 acres were forested. The total volume estimate, to be done separately for each species, was to be based on the average for the 89 sampled plots on these 586 acres.
A circular area two-person cruise was then initiated. Typically, about 10 plots could be cruised in one day. The foresters counted the entire number of cordwood trees over 6 inches in diameter within each 1/7-acre circle. Then, back in the office in Covariance, the number of trees on each plot was entered into a computer according to species, diameter, and possible end product. The file Bodfish Trees.xlsx contains this tabulation from the cruise notes of the counts for spruce, hard maple, and beech of the number of cordwood trees on the 89 sampled plots.
With these data, Intergalactica now had to decide whether to contract to log the lot. Ralph Butts, manager of Woodlands Operations, knew that even though Intergalactica would pay on the basis of the weight received at the mill, he needed at least 31,000 cordwood size trees on the lot to make operations economical. More detailed knowledge of the amount of timber by species would help the Pluto Mill make the crucial blending decisions that affect the cost and quality of the resulting wood pulp.
This was just one of several hundred similar contracts to be made over the coming year. Butts were concerned with the rising cost of cruising in the Southeastern Region. Was the Bodfish Lot cruise excessive, he wondered? Could he get by in the future with considerably smaller samples? Suppose that only one-half or one-quarter of the plots on Bodfish had been cruised?