scholarly journals Determining the value of standing timber for harvest planning optimization

2020 ◽  
Vol 81 (2) ◽  
pp. 65-74
Author(s):  
Karol Zaborski ◽  
Jan Banaś ◽  
Anna Kożuch
Keyword(s):  
Linear Programming ◽  
Net Present Value ◽  
Sustainable Forest Management ◽  
Sustainable Use ◽  
The State ◽  
Present Value ◽  
Planning Period ◽  
Individual Tree ◽  
Harvest Volume ◽  
Standing Timber

Abstract Forest managers conducting sustainable forest management are guided by the principles of sustainable use of natural resources, which involve the need for long and short-term planning in organizational units of the State Forests. Plans often differ from reality by the time individual treatments and cuts are to be performed. For economic reasons, it is important to optimize harvest planning, not only focusing on the volume of timber to be harvested, but also the price differences of individual tree species and sort types of wood. The purpose of this study was to present methods evaluating standing timber and to assess their usefulness in optimizing the harvest volume using linear programming. Stands designated to be cut were evaluated using transaction value methods, i.e. “the stumpage value method” M1, the “consumption value” method M2, as well as the net present value (NPV) method M3. The research material was obtained from the State Forests Information System (SILP) for the Marcule Forest District covering the years 2014–2018. The stand values were determined at the beginning and end of the 10-year planning period. We observed that the stand value (standing timber) differed significantly between method M2 as compared to method M1. the value of stands determined by method M3, on the other hand, decreased as the discount rate increased. In the process of optimizing the selection of stands for felling, economic criteria should also be taken into account and this is a direct measure of obtainable standing timber in terms of the cutting possibility in the given planning period. In stands where one species dominates, a simplified method of determining the value (M1) can be used, whereas in stands with significant species diversity, method M2 provides a significantly more accurate value for the cutting timber. However, if harvest volume optimization using linear programming methods is to take longer time periods into account, e.g. 30 years (three 10-year economic planning periods), the most reasonable method for determining the value of stands is the net present value method M3.

scholarly journals An Application of Linear Programming for Short-Term Harvest Scheduling

1988 ◽  
Vol 5 (2) ◽  
pp. 145-148 ◽  
Author(s):  
Douglas C. Macmillan ◽  
Stephen E. Fairweather
Keyword(s):  
Linear Programming ◽  
Net Present Value ◽  
Harvest Scheduling ◽  
Present Value ◽  
Short Term ◽  
Planning Period ◽  
Additional Information ◽  
Forest Ownership ◽  
Forest Enterprises ◽  
High Level

Abstract The technique of linear programming (LP) is illustrated by developing a harvest schedule for an industrial forest ownership in northwestern Pennsylvania. The objective was to maximize net present value of the harvest over a five-year planning period. The effect of changes in timber value and growth rate on the optimum schedule was determined. Sensitivity analysis provided additional information the manager could use to make decisions. In order to successfully apply LP, the forester must be able to define the management objective of the harvest schedule and the resource and managerial constraints that will influence its attainment. Data used in the model have to be available and reliable. Many forest enterprises should be in the position to adopt LP since commercial programs for microcomputers are now available for which a high level of computing expertise is not required. North. J. Appl. For. 5:145-148, June 1988.

scholarly journals Economical assessment of an investment related to the establishment of a new farrowing place and pig-rearing building

2019 ◽  
Vol 7 (1-2) ◽  
pp. 115-120
Author(s):  
Brigitta Zsótér ◽  
Ágnes Milojev
Keyword(s):  
Net Present Value ◽  
Research Work ◽  
The State ◽  
Point Of View ◽  
Bank Credit ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Payback Time ◽  
Pig Farm ◽  
The Given

In our research work we aimed at carrying out an economical assessment of an investment and development of substantial volume. The examined project was completed at a pig-farm during which a new farrowing place and pig rearing building were built, as well as the renovation of the existing pig-farm. All of them were financed partly from the firm’s own source, partly from a non-repayable aid granted by the state, and finally from a credit granted by a commercial bank. The term of the credit is 10 years and the return of the investment expected by the investors is 8%, so we carried out our calculations according to these data. We examined the three possible ways of financing the investment from the economical point of view, as a result we proposed three hypotheses. Our hypotheses are: Hypothesis 1 (Case „A”): The investment will be financially recovered within the examined period of 10 years if it is financed from the firm’s own source, the state grant and the bank credit. Hypothesis 2 (Case „B”): The investment can be economically completed within the given period of time if the project meets the costs from the firm’s own source and the credit. Hypothesis 3 (Case „C”): The investment will be economically accomplished within the examined 10 years provided the firm finances the project from their own source and the state grant. In our calculations we used the net present value (NPV), the internal rate of return (IRR), the payback time (PB), the discounted payback time (DPB) and the profitability index (PI) as economy indicators. We carried out our calculations regarding 10 years to be able to compare the results since the term of the granted credit is 10 years, too.  

Seed Orchard Replacement Guidelines: A Linear Programming Approach

1991 ◽  
Vol 15 (3) ◽  
pp. 117-125
Author(s):  
Jay O'Laughlin ◽  
Christopher M. Whatley ◽  
Craig R. McKinley
Keyword(s):  
Linear Programming ◽  
Net Present Value ◽  
Programming Model ◽  
Seed Orchard ◽  
Planning Horizon ◽  
Linear Programming Model ◽  
Programming Approach ◽  
Specific Production ◽  
Present Value ◽  
Linear Programming Approach

Abstract A linear programming model is used to determine when to replace a seed orchard with subsequent rotations reflecting additional genetic improvements. The objective is to maximize the net present value of the orchard while meeting specific production targets of exactly 1,000 pounds of seed per year. The solution calls for a 39 ac orchard over the 50-year planning horizon, and provides a schedule indicating both when and how much of the orchard is to be replaced. Slightly more than half (55%) of the first orchard rotation is replaced between years 13 and 21—roughly 13% in year 13, 14% in year 15, 16% in year 17, 4% in year 19, and 8% in year 21. The remaining 45% of the orchard is replaced at the maximum orchard age of 25. To meet production needs in years 25 through 34 without using additional orchard acreage, 2,550 pounds of surplus seed are produced between years 13 and 24. South. J. Appl. For. 15(3):117-125.

scholarly journals Assessment of Forest Investment, Financial Flows and Revenue Collection in the Abia State Forest Sector, Nigeria

2021 ◽  
Vol 25 (5) ◽  
pp. 763-771
Author(s):  
E.C. Egu ◽  
E.C. Nwankwo ◽  
E.E. Offiong
Keyword(s):  
Sustainable Forest Management ◽  
Sustainable Use ◽  
Forest Resources ◽  
The State ◽  
Forest Sector ◽  
Financial Flows ◽  
Forest Reserves ◽  
Revenue Collection ◽  
Skilled Personnel ◽  
The Government

Varieties of resources abound in the forests of Nigeria and especially in Abia state, an economic treasure house of resources. Sustainable management of the forests in Nigeria is crucial for a consistent supply of forest resources. Ten forest reserves were surveyed to determine the extent of the government’s involvement in sustainable forest management in Abia State. The government consider the forest reserves, as a revenue-generating venture, leading to the excessive exploitation of forest resources in the state. The exploitation is without regard for sustainability as the harvest is consistently higher than its growth. The government’s involvement in funding the forestry sector over these years has been the payment of salaries to staff of the State forestry department and revenue collection, while international donors, corporate organizations and private sectors have not considerably invested in the Abia State forest sector. The survey revealed the challenges militating the productivity of the forest sector in Abia State, namely: inadequate capital, administrative incompetence and bureaucratic bottleneck, political instability, ecological challenge, insufficient skilled personnel, corruption, lack of forest equipment and inefficient forest laws. Training should be organized for the forest staff and communities to ensure the sustainable use of forest resources. There is a need for the modernization of forestry practice in Abia State and all that go with it being accorded a well-deserved priority in the present economic dispensation in Nigeria.

A Decision Advisor to Manage the Implications of Alloy 600 Issues

2003 ◽  
Author(s):  
R. K. Perdue ◽  
C. W. Mycoff ◽  
J. Woodcock ◽  
T. A. Meyer ◽  
R. Llovet
Keyword(s):  
Crack Propagation ◽  
Net Present Value ◽  
Computer Software ◽  
Alloy 600 ◽  
Present Value ◽  
Planning Period ◽  
Software Model ◽  
Plant Operations ◽  
Plant Level ◽  
The Impact

A Decision Advisor process has been designed to efficiently support plant level decisions, and the process has been specialized to support decisions pertaining to plant locations that have alloy 600 degradation issues. The process guides the decision maker through phases of framing the problem, developing options, selecting alternatives, and planning. The decision making process is supported by a computer software model that quantifies the net present value costs of each identified strategy. The Alloy 600 Decision Advisor model calculates crack initiation and growth and the impact on operations and revenue for a given inspection and repair strategy. The three major modules in a component Decision Advisor are: engineering issues of crack propagation and detection, plant operations, and financial impacts. The crack propagation and detection module captures the current state-of-the-art knowledge regarding alloy 600 (and alloy 182/82 for welds) degradation, combining statistical analysis of historical data and expert engineering judgment to produce a forecast of cracks and leaks over the relevant planning period. This is input to the plant operational impact module, which calculates the resulting impacts on plant revenue and cost drivers. The model can be readily updated as new information (such as inspection results) comes available. Results are provided in a report describing the goals and objectives together with the technical and financial input, and providing the plant-level net present value cost of each alternative. The net present value costs include typical costs of implementation (such as inspections and repairs) as well as the effects on power production and plant revenue.

scholarly journals Effect of Stand Structure and Number of Sample Trees on Optimal Management for Scots Pine: a Model-Based Study

Forests ◽  
2018 ◽  
Vol 9 (12) ◽  
pp. 750 ◽  
Author(s):  
Anssi Ahtikoski ◽  
Jouni Siipilehto ◽  
Hannu Salminen ◽  
Mika Lehtonen ◽  
Jari Hynynen
Keyword(s):  
Objective Function ◽  
Sample Size ◽  
Scots Pine ◽  
Net Present Value ◽  
Stand Structure ◽  
Objective Function Value ◽  
Sample Sizes ◽  
Present Value ◽  
Individual Tree ◽  
Recovery Method

This study presents an attempt to discover the effect of sample size on the financial outcome derived by stand-level optimization with individual tree modeling. The initial stand structure was altered to reflect sparse, average, and dense Scots pine (Pinus sylvestris L.) stands. The stands had varying numbers of stems but identical weighted median diameters and stand basal areas. The hypothetical Weibull diameter distributions were solved according to the parameter recovery method. The trees were systematically sampled with respect to the tree basal area corresponding to sample sizes of 10, 20, or 40 trees. We optimized the stand management with varying numbers of sample trees and with varying stand structures and compared the optimal solutions with respect to the objective function value (maximum net present value) and underlying management schedule. The results for the pine stands in southern and central Finland indicated that the variations in the objective function value relating to sample size were minor (<2.6%) in the sparse and average stand densities but exceeded 3% in the dense stands. Generally, the stand density is not always known, and thus, we may need to generalize the average density for all cases in question. This assumption, however, resulted in overestimations with respect to the optimal rotation period and financial performance in this study. The overestimations in the net present value decreased along with the increasing sample size, from 22% to 14% in the sample sizes of 10 and 40 trees, respectively.

scholarly journals Computational modeling for irrigated agriculture planning. Part I: general description and linear programming

2008 ◽  
Vol 28 (3) ◽  
pp. 471-482 ◽  
Author(s):  
João C. F. Borges Júnior ◽  
Paulo A. Ferreira ◽  
Camilo L. T. Andrade ◽  
Bettina Hedden-Dunkhorst
Keyword(s):  
Linear Programming ◽  
Computational Modeling ◽  
Water Use ◽  
Net Present Value ◽  
Programming Model ◽  
Linear Programming Model ◽  
Irrigated Agriculture ◽  
General Description ◽  
Present Value ◽  
Financial Return

Linear programming models are effective tools to support initial or periodic planning of agricultural enterprises, requiring, however, technical coefficients that can be determined using computer simulation models. This paper, presented in two parts, deals with the development, application and tests of a methodology and of a computational modeling tool to support planning of irrigated agriculture activities. Part I aimed at the development and application, including sensitivity analysis, of a multiyear linear programming model to optimize the financial return and water use, at farm level for Jaíba irrigation scheme, Minas Gerais State, Brazil, using data on crop irrigation requirement and yield, obtained from previous simulation with MCID model. The linear programming model outputted a crop pattern to which a maximum total net present value of R$ 372,723.00 for the four years period, was obtained. Constraints on monthly water availability, labor, land and production were critical in the optimal solution. In relation to the water use optimization, it was verified that an expressive reductions on the irrigation requirements may be achieved by small reductions on the maximum total net present value.

scholarly journals Use of Optimization Modeling to Assess the Effect of Timber and Carbon Pricing on Harvest Scheduling, Carbon Sequestration, and Net Present Value of Eucalyptus Plantations

Forests ◽  
2021 ◽  
Vol 12 (6) ◽  
pp. 651
Author(s):  
Andrés Hirigoyen ◽  
Mauricio Acuna ◽  
Cecilia Rachid-Casnati ◽  
Jorge Franco ◽  
Rafael Navarro-Cerrillo
Keyword(s):  
Net Present Value ◽  
Programming Model ◽  
C Sequestration ◽  
Mixed Integer ◽  
Harvest Scheduling ◽  
Economic Returns ◽  
Present Value ◽  
Planning Period ◽  
Eucalyptus Dunnii ◽  
The Impact

Quantifying the impact of carbon (C) and timber prices on harvest scheduling and economic returns is essential to define strategies for the sustainable management of short-rotation plantations so that they can provide timber products and contribute to C sequestration. In this paper, we present a mixed-integer linear programming model that optimizes harvest scheduling at the forest level, C sequestration, and Net Present Value (NPV) over a planning period of up to 15 years. The model included revenue from the sale of timber (pulplogs) and credits from the net C sequestered during the life of the stands. In addition, plantation establishment, management, harvesting, and transportation costs were included in the analysis. The study area comprised 88 Eucalyptus grandis W. Hill and Eucalyptus dunnii Maiden stands located in Uruguay, totaling a forest area of nearly 1,882 ha. The study investigated the impact of C and timber prices on NPV, harvest schedules, stands’ harvest age, timber flows to customers, and C sequestered per period. The maximum NPV among all the scenarios evaluated (USD 7.53 M) was calculated for a C price of 30 USD t−1, an interest rate of 6%, and a timber price of 75 USD m−3. This was USD 2.14 M higher than the scenario with the same parameters but that included only revenue from timber. C prices also impacted stands’ harvest age, C sequestration, and timber flows delivered to end customers. On average, in scenarios that included C prices, timber flows and C sequestration increased by 15.4 and 12.1%, respectively, when C price increased from 5 to 30 USD t−1. These results demonstrate that harvest scheduling, harvest age, and NPV are very sensitive to C and timber, and that the best economic returns are obtained when the stands are managed to maximize timber production and C sequestration.

scholarly journals Investment Scenarios in the Clonal Conilon Coffee Planting with an Irrigated System: A Study in a City from Rondônia, Brazil

2020 ◽  
Vol 9 (1) ◽  
pp. 41
Author(s):  
Camila Dutra Santos de Morais ◽  
Sandra Da Cruz Garcia ◽  
Júlio Sancho Militão ◽  
Davy Ítalo Ribeiro Da Silva ◽  
Francisco Cordeiro Júnior ◽  
...  
Keyword(s):  
Net Present Value ◽  
The State ◽  
Rate Of Return ◽  
Financial Viability ◽  
Internal Rate Of Return ◽  
Present Value ◽  
Valuation Methods ◽  
System A ◽  
Financial Feasibility ◽  
Small Producer

This article aims to analyze the financial feasibility of implementing a clonal conilon coffee crop in the State of Rondônia. For this, a research with quantitative procedures was carried out, having as a locus of research a property in the municipality of Nova Brasilândia D’Oeste, interior of the state of Rondônia (Brazil). Based on the assumption that investments are made to generate value for the investor, the expenses incurred and estimates of future expenses were measured, with two scenarios, the first with the presence of the plague (scale) and the second without the presence of the same. Therefore, it became possible to analyze the valuation methods through the projections of Net Present Value, Internal Rate of Return and Payback. With these results, an analysis of the financial viability of the crop in question was carried out, which demonstrated a significant expense in the first years for the small producer, having a return from the fifth year on, proving to be financially viable and advantageous.

scholarly journals Evaluating the long-term influence of alternative commercial thinning regimes and harvesting systems on projected net present value of precommercially thinned spruce–fir stands in northern Maine

2017 ◽  
Vol 47 (2) ◽  
pp. 203-214 ◽  
Author(s):  
Patrick Hiesl ◽  
Mindy S. Crandall ◽  
Aaron Weiskittel ◽  
Jeffrey G. Benjamin ◽  
Robert G. Wagner
Keyword(s):  
Net Present Value ◽  
Growth And Yield ◽  
Stand Age ◽  
Present Value ◽  
Yield Model ◽  
Individual Tree ◽  
Commercial Thinning ◽  
Harvesting Systems ◽  
Timing Of Entry

Commercial thinning (CT) is an important silvicultural practice in the northeastern United States. Relatively little is known, however, about the interaction of harvest system and treatment (removal intensity or timing of entry) on the overall profitability of CT. To address this question, 10-year measurements from a controlled CT experiment across six sites in Maine were used to project the long-term effect of removal intensity (33% and 50% relative density reduction) and timing of entry (no delay, 5-year delay, 10-year delay) on (i) maximum net present value (NPV), (ii) timing of maximum NPV, and (iii) the effect of three harvesting systems (cut-to-length, whole-tree, hybrid systems) on maximum NPV. A regional growth and yield model was used to project individual-tree growth and mortality into the future. Harvest costs for the harvesting systems were estimated using regional cycle-time equations. No difference was found in maximum NPV between the CT and non-CT areas or the timing of CT entry. Stand age at time of maximum NPV differed between delays but not between the two removal intensities. Our results indicate that there is no economic benefit in delaying a CT or removing more volume at the time of thinning for the range of stand conditions evaluated.

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