A complex set of variables in this, but the starting point for me is the price which allows me to end up at a reasonable hourly rate after allowing for depreciation on capital and running costs.
I am using low capital investment equipment (Alaskan and chainsaw driven bandsaw, plus powerheads) but have relatively high consumable costs (Aspen, chain oil, saw bands). My production rate is relatively low, although bearing in mind timber is priced in cubic feet rather than square feet sawn, I can improve daily production significantly for thicker sections. The bandsaw is much more efficient but limited throat. My non-productive time is spent sharpening saw bands and transporting equipment (mine is designed to be portable) and I have a mix of time and costs for servicing/maintaining saws and chain.
When I balanced up all the above, it worked out that if I buy wood at firewood prices I end up with an acceptable hourly rate if I sell at £15/cu.ft so that sets a base price.
Oak generally costs more to buy in than firewood prices, as do some other desirable species such as walnut, so to achieve the same hourly rate I need to sell for more.
Most of my milling is either for my own use, or on a day rate for people. If I am supplying timber then I tend to end up trying to set up three-person deals where someone wants something and someone else has the appropriate butt. I then act as a midde man and buy the log, mill it and sell it straight on. This works out as, being pre-sold, I don't add time for stacking, marketing etc. so effectively 'free delivery' is the added benefit to the customer since I can mill it and transport the timber straight to the customer, rather than hanging on to it.
When you start selling from stock, it gets more complex. Firstly, you have to add in costs for marketing, including your time, plus the significant time spent selling boards - you can guarantee that the customer will want to see the whole stack when choosing their board, even when they end up wanting the board on the top! You also know that the wider boards will sell more easily than the ones from further out, so you end up with mixed pricing, residual stock etc. I don't really try to do this, but sometimes when I end up milling for my own use I will have spare boards which I will sell on to recover costs. I tend to go for £20/cu.ft for these, to cover the above (£25/cu.ft for the more expensive species to buy in).
All the above is based on green timber. Seasoned goes up further as either you have the time of air drying or the cost and effort of kiln drying, plus an amount of spoilage for both.
In different set-ups, the above factors will move around. I would guess that an lt15 may work out similar to the above as you increase production but also increase capital costs (depreciation) which in part time operation will add enough per cube to balance out. A small commercial set-up such as Big J's clearly enables some economies of scale and he has run at slightly lower prices - probably equivalent overall at point of delivery to my pre-sold logs. When you get into really big production set-ups such as the continuously operated softwood production plants run by BSW the costs do drop significantly but they supply a different market of course.
Slightly rambling thoughts there, but might help in considering the right factors.
Alec