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An inquiry into the behavior of softwood plywood price

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https://ir.library.oregonstate.edu/concern/graduate_projects/00000464c

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  • The small size of the average plywood mill, and the wide spread of markets, has fostered the growth of independent wholesalers, or jobbers, as the main distribution channel for softwood plywood. Jobbers buy directly from mills, or indirectly through sales agents representing mills, and in turn sell to retail outlets. Since World War II, there has been large growth in the number of jobbers. In l95l, jobbers handled 79.L per cent of the total output of the plywood industry. Of the remaining 20.6 per cent, 3.1 per cent was handled by sales branches, and 17.5 per cent was sold. either through brokers, or directly to commercial outlets by mills. (3, p. 7) There are only a small number of sales branches which are operated by large producing organizations. Sales branches maintain warehouses and a sales force to handle sales to retail outlets, and act basically as the wholesaler for those mills so represented. Brokers play a minor role in distribution, and are most active during periods of short supply. Brokers do not warehouse, but work rather, as contact men between buyers and sellers. The majority of brokers do not maintain constant relationships with any single mill, but deal where contacts can be made. Growth in the number of wholesalers has lead to increased price and non-price competition. Non-price competition has taken the form of broader services to the customer, and has caused the increased necessity of warehousing on the part of the jobber (6). A study conducted in 1953 revealed that 29 per cent of jobbers sales were made by direct mill shipment, while 71 per cent were made from jobbers inventories (3, p. 9). A survey of 900 jobbers, completed in 19S5, found that typical full-service jobber carried a 50 day inventory of ply-wood on hand (3, p. II). This inventory reduces the necessity of warehousing on the part of the producer and retailer, and plays a role in stabilization of seasonal fluctuation in both price and production of softwood plywood.
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