Integrated forest harvest planning and road-building model with consideration of economies of scale

We consider the problem of tactical forest management over a 5-year horizon with yearly periods. The main decisions made consider which harvest areas to cut in each period, the flow of timber from an area to each wood-processing mill to satisfy its annual demand, and which roads to build to access a harvest area not connected to the existing road network. The goal is to minimize the total transportation and road-building costs subject to budget limitations. To explore the benefits of economies of scale (EOS) in road construction, we incorporated this notion in the proposed model. Then, the efficiency of the obtained solution is compared with the model without EOS. The proposed model is a mixed-integer linear program, including several timber assortments and multiple periods. We validated the model for a realistic case in the context of the province of Quebec. The results demonstrate that consideration of EOS significantly reduces the total cost by about 5.3%. In the EOS solution, the road segments that are built every year are very concentrated in specific parts of the region, allowing a road-building company to take advantage of EOS. Moreover, this solution provides a much more efficient timber transportation plan.