The Québec Ministry of Natural Resources Uses Linear Programming to Understand the Wood-Fiber Market

In spring 1996, Québec's Ministry of Natural Resources began using a descriptive mathematical programming model to support various negotiations in the wood-fiber markets. The model, which uses linear programming to solve an economic-equilibrium program, allows the representative of the ministry to come to industry roundtables with accurate scenario analyses for the wood-fiber market. The tool we developed and implemented uses the large amounts of data available to government agencies to foresee and explain the general economic trends facing both lumber and paper producers. During its development, our team of operations-research experts, economists, engineers, and civil servants developed an unprecedented understanding of the wood-fiber market. The ministry incorporated these insights in subsequent government policy aimed at improving sawmill yield and stabilizing market behavior.