Economics of cutting hardwood dimension parts with an automated system

A financial analysis using discounted cash-flow decision methods was completed to determine the economic feasibility of replacing a conventional roughmill crosscut and rip operation with a proposed automated computer vision and laser cutting system. Red oak and soft maple lumber were cut at production levels of 30 thousand board feet (MBF)/day and 5 MBF/day to produce furniture and kitchen cabinet parts. Potential before-tax savings per day were determined from yield improvement as a direct result of reducing only the kerf width and labor costs, and ranged from $3,440/day to $406/day at production levels of 30 MBF/day and 5 MBF/day, respectively. A daily lumber volume break-even analysis shows the required production level ranged from 5.8 MBF/day for a plant currently using 5 MBF/day, to 14.9 MBF/day for a plant capable of using 30 MBF/day. The after-tax net present values of the laser system investment were positive at production levels of 30 MBF/day, and negative at production levels of 5 MBF/day. Under the assumptions of this study, plant production levels and the price structure of lumber used were the important factors in determining the feasibility of making an Automated Lumber Processing System investment.

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