Decision making in forest management with consideration of stochastic prices

Limaei, S.M., Lohmander, P., & Obersteiner, M. ORCID: (2010). Decision making in forest management with consideration of stochastic prices. Iranian Journal of Operations Research 2 (1) 32-40.

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The optimal harvesting policy is calculated as a function of the entering stock, the price state, the harvesting cost, and the rate of interest in the capital market. In order to determine the optimal harvest schedule, the growth function and stumpage price process are estimated for the Swedish mixed species forests. The stumpage price is assumed to follow a stochastic Markov process. A stochastic dynamic programming technique and traditional deterministic methods are used to obtain the optimal decisions. The expected present value of all future profits is maximized. The results of adaptive optimization are compared with results obtained by the traditional deterministic approach. The results show a significant increase in the expected economic values via optimal adaptive decisions.

Item Type: Article
Uncontrolled Keywords: Optimal harvesting; Stochastic dynamic programming; Forest growth; Stumpage prices; Swedish forests
Research Programs: Forestry (FOR)
Bibliographic Reference: Iranian Journal of Operations Research; 2(1):32-40 (Spring 2010)
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Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:43
Last Modified: 27 Aug 2021 17:21

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