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University essay from SLU/Dept. of Forest Resource Management

Author: Christer Ranvald; [1996]

Keywords: roundwood;

Abstract: Forest enterprises have always searched for ways to improve efficiency. For the past few years there has been an emphasis on stock-keeping levels. Increased demand for fresh round timber and the need to decrease the amount of tied-up capital has made the forest industry reduce its inventory levels. This has brought on a higher demand on the timber supply from the forest management districts concerning both delivery in time and assortment output. As a result, the flow of timber has fluctuated a lot with serious consequence for the timber supply during 1994. One reason was unexpected weather conditions which lead to transportation stops. This MSc thesis deals with the planning of logging operations and the problems that are involved in that process for SCA Forest and Timber. This study was initiated by the wood procurement and transportation department, Virke syd, and Strömsund's forest management district within SCA. The purpose is to formulate a flexible and optimizing model for decision-support in short-term planning and follow-up of logging operations. The decision-support involves linear programming in order to minimize the cost of cross­ cutting losses, delivery bonus-losses and moving the logging machines from on logging unit to another. The aim is to increase the adaptability between timber request and logging result on assortment level. A seeond objective is to make a survey offactors that influence the possibility for forest management districtsto achieve a continuous timber yield in time and assortment output. The validity of the model in this paper is limited to the planning techniques and philosophy used within SCA and their short-term planning routine. The linear programming model involves: • a planning horizon of one to two months • optimization of logging unit selection regarding rnachine resources in the ranger district • five assortments; pine and spruce timber, pulpwood of softwood, fresh cut spruce and hardwood • four cross-cutting alternatives; minimal top-diameter of timber; 12, 14, 16, 18 cm. A result from an optimization gives a logging unit selection that minimizes the costs, earlier mentioned, for periods extending from a couple of days up to two months. The main thesis is that decision concerning resource allocation is to be taken "just in time". The advantage with this procedure is that the decision maker has the latest information regarding the actual wood flow and can make more accurate decisions. To improve management and the linear programming model a continuously increasing delivery bonus system has been constructed to allow the forest managementdistrictsto equalize their logging operation costs with the bonus. To refine the decision basis, harvester measurement of timber volume has been used in the decision-support system, to make simple yield forecast for logging units. Results from the decision-support system run on material from Strömsund's forest management district have involved a large amount of moving logging resources between logging units. This is mainly due to a relatively large difference between pulp wood and timber prices. U sing the current timber and pulp wood prices the marginal cost for cross­ cutting adjustments usually exceeded the cost for shifting a logging unit. This is also related to the size of the logging unit, whereas larger logging units have a low shifting cost per cubic meter. Major conclusions: • Output estimations used within SCA short-term planning routines suffer from bias and random errors. The most serious are the area estimation and the assortment output functions. This makes it difficult to maintain a continuous timber yield in time and assortment output in shorter periods. • The decision support model that this study focuses on can be used on a practical basis hut there is a substantial risk for suboptimization if the planning period is shorter than a month andfor the wood flow demands are set too high. • The use of "intelligent" computer based planning routines such as the model constructed in this study could improve decision-making if the decision-maker fully understood the fundamentals in economic optimization and the use of computers. The key is to use common sense with computer-based planning. • The use of harvest measurement, instead of wood measurement at milis, would improve both planning and foliow-up with more accurate, daily based logging unit related measures. This would refine the decision basis for the planner and make it possible to do yield forecasting. • Increase the logging team's influence and co-operation especialiy in areas concerning wood flow planning and follow-up. This would not only give interesting task's for the logging team's, it could also give faster more pliable solutions in the area of interest. • Search for unconventional solutions in keeping a good wood flow; for example aliocate more than one logging team to a logging unit, move logging resources to logging units that give a more appropriate wood flow, change cutting form, etc.

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