Maximizing Products and Rates of Return in Forest Management

May. 24, 2018

Imagine a company has just purchased a large parcel of land with significant acreage of mixed hardwood-pine forests, but the company wants to clear the land and plant it entirely to another species.  You are part of a team employed by the company and tasked with determining the best management strategy to maximize forestry products and rates of return.

Forest management students at The Ohio State University were given this real-world scenario as part of their final project in the ENR 5320 Forest Management course taught by Roger Williams, associate professor of forest ecosystem analysis and management in the School of Environment and Natural Resources.

Forest managers are required to evaluate the management of forests at the tactical and operational level to determine if current plans are meeting goals and objectives in the most judicious way. While events such as disease and insect outbreaks, and wildfire can cause short-term temporary plan changes, changes in market demands and prices can have a more long-term impact, says Williams.

“Current management plans can still be meeting goals and objectives, but better alternatives may arise that are more feasible and plausible. This project allows students to simulate this practice of evaluating current management plans under changing conditions, and explore the possibility of better alternatives,” Williams said.

The end of the semester project challenged students to apply what they learned throughout the semester to tackle this real-world scenario and provide rationale based on their analysis for continuing the current plan, or why any alternative they propose is better. 


Using this scenario, the students were given the following task:  Determine what the best management strategy might be to maximize products and rates of return.  To help determine the best management strategy, students were provided with the following information:  guiding rate, site preparation and planting costs, logging costs, sawtimber and pulpwood prices and site index for age and acreage. 

Students used a computer forest growth and yield model to run their different scenarios to generate the yields necessary for their calculations. They were asked to perform a set of economic analyses, including net present value, benefit/cost analysis and rate of return to justify their management strategy recommendations.

Final management strategies were assessed on total forest volume yields, economic analysis and any further management justification presented based on the analysis. Four teams were recognized for their final management strategies.

ENR 5320 teams recognized for their forestry management strategies as part of their final class project.  Photos courtesy of Roger Williams.

 

Source:  Roger Williams