Economic choice for hardwood sawmill operations (ECHO)
Reductions in sawkerf on headrigs and resaws can dramatically increase lumber recovery. Research has also shown that lumber target size reductions are even more important than kerf reductions in providing increased lumber recovery. Decreases in either sawkerf or lumber size, however, always come at some cost in both capital and variable costs. Determining whether the financial benefits from increased lumber yield outweigh the incurred costs can be a difficult task. The Economic Choice for Hardwood Sawmill Operations (ECHO) is a software package developed to help analyze the economic benefit of installing thinner-kerf and higher-accuracy sawing machines. Replacement of headrigs and resaws with reduced kerfs and increased sawing accuracy can be tested. ECHO will assist in the estimation of the increased lumber recovery and the resultant increased revenue from reducing kerf or lumber sizes on headrigs and resaws. As an alternative, users may make their own increased revenue estimate. Users must also determine the estimated increased costs expected from equipment changes. Based on the estimated increased revenues and costs, a discounted cash flow analysis is performed by ECHO. The investment feasibility measures of present net value, rate of return, and payback period are provided. The software also addresses federal tax implications.
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