LOG PAYING CAPABILITY FACTOR
Indicates the mill’s ability to cover the mix of delivered logs’ average cost by the average selling price of the basket of products produced.
The higher the factor above 2, the better the mill’s ability to cover raw material cost from the product basket produced.
This can be illustrated with an analogy of purchasing a house on mortgage.
The homeowner needs to pay the monthly mortgage, rates and taxes, water and electricity bill. The house is leased to a tenant and the monthly expenses of the house are recovered from the rental received.