The present study is an examination of the problems involved in raw-wood inventory from the viewpoint of business economics. The term inventory used here includes the standing timber marked for cutting as well as delivery contracts. The task of inventory is to buffer the differences in timing, locality, quantity and quality caused by purchase, production and delivery processes. The basic problem is concerned with profits.
The basic aim is to keep the inventory small. Its limits are determined by comparing the storage costs and costs of shortage. The costs may be decreased without risking the reliability of deliveries by technical development and road improvement, which also decrease dependence on the seasonal variation of harvesting of timber. A model based on present practices, statistics and practical experiences can be used to calculate different alternatives. The volume of purchases, felling, deliveries, transportation, and differences in quantities and transfer is used to estimate the target level of the inventory. It forms a forecast which the future performances can be compared to. In addition to monitoring turnover rate of the total inventory and capital tied to the inventory, also the exceptions in structure, time and quantity of the inventory and the factors changing it should be monitored. A special difficulty in timber inventory book-keeping are the continuous variations in the measured volumes even if no loss occurs.
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