Canadian Forest Service Publications

Optimal timber harvest scheduling under harvest volume constraints: a comparison of two opportunity cost criteria. 1992. Armstrong, G.W.; Phillips, W.E.; Beck, J.A., Jr. Canadian Journal of Forest Research 22(4): 497-503.

Year: 1992

Available from: Pacific Forestry Centre

Catalog ID: 3233

Language: English

CFS Availability: Order paper copy (free)

Abstract

A simple model is developed to determine the economically optimal combination of stands to harvest in a period when there are periodic maximum harvest volume constraints. The model is formulated using concepts developed in the Faustmann optimum forest rotation model. The objective function minimizes the net opportunity cost of delayed harvest. For each stand in the forest, the model is used to determine if the stand should be harvested this period or if the harvest decision should be deferred to the next period. In the typical exposition of the Faustmann model, the opportunity costs of delayed harvest are expressed per unit area. Because of this, and the spatial orientation of forest management, it is tempting to use costs per hectare to set harvest priority. However, when harvests are constrained by some maximum harvest volume, costs per unit volume are the appropriate criterion to use. The purpose of this paper is to demonstrate the economic losses resulting from the use of the inappropriate priority criterion. The model is applied to a study area in Saskatchewan. As well as demonstrating the economic losses, the study shows that a much wider variety of species associations and site classes are scheduled for harvest when the volume-based ranking criterion is used. This mix of harvested species and sites is consistent with the observed behavior of firms. It has been argued elsewhere that this behaviour is due largely to government-imposed behaviour (e.g., operating ground rules) or to the spatial considerations of forest management. We suggest here that at least some of this behaviour can be attributed to optimal response to harvest volume constraints.