A Dynamic Analysis of Interest Rate and Logging Factors in Reducing Saw Timber Procurement Costs

Abstract

Wood harvesting operations were controlled in terms of financial expenditure and material flow at three related steps in the wood procurement system -- logging, roadside inventorying, and transportation. Wood flow from sawtimber to available sawlogs in the mill yard was evaluated using the technique of dynamic programming. This program was successfully linked with data processing (input) and interactive interpretation procedures (output). The power of the algorithm was increased by implementing separable programming. In this model a nonlinear transportation function was linked to linear logging and inventorying functions.

The dynamic programming procedure was not as effective computationally as the Simplex procedure, but future trends in computer development can be expected to offer increasing computing capacity for dynamic procedures. Small tactical problems were solved more accurately as the model construction was closer to real-life systems. No interest rate effects on sawtimber allocation were observed in the sensitivity analyses conducted, but transportation allocation as a phase of material flow changed when the effect of varying volumes of logging was analyzed.

Keywords:

• integrated timber allocation
• tactical planning
• dynamic programming
• cumulative cost curve
• geographical decentralizing