On the Importance of Integrating Transportation Costs into the Tactical Forest Harvest Scheduling Model

In tactical forest management planning, the decisions required to meet the strategic plan are made, and these include: i) scheduling of spatially explicit harvest-blocks; construction of a road-network required to access these blocks; and iii) transportation costs within the tactical forest planning area (hereafter only referred to as transportation costs) that emerge from the first two decisions. These three decisions are interdependent and should therefore be integrated in any optimization model. At present, this integration is not filly made. This is because: i) the integrated model is NP-hard, and exact solutions are not feasible for large and medium-sized forests; and ii) metaheuristic search algorithms, which can be used on larger forests, have not integrated transportation costs realistically. The economic consequences of not integrating transportation costs into tactical planning models has not been quantified and evaluated by researchers; and the objective of this paper is to fill this gap in knowledge. To this end, an exact solution approach is used to solve and compare two integrated models: i) a model in which transportation costs are included in the objective function, and b) a model in which transportation costs are excluded from the objective function. The models were applied to three forests ranging in area from 6628 to 19,677 ha. Results show that: i) the model which included transportation costs yielded solutions with major reductions in both transportation and total costs; and ii) that, as the forests to which the model was applied tripled in area (from 6628 ha to 19,677 ha), the percent reduction in total costs increased disproportionately-more than fivefold (from 3.9% to 21%). These results are important, for they indicate that the integration of transportation costs into a tactical planning model is of major economic consequence.