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Optimal Rotation and Thinning

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Abstract:

The paper discusses the problem of simultaneous determination of optimal rotation and thinning. First, the classical conditions for optimal rotation are derived using continuous discounting. These derivations assume that the current net receipts (positive or negative) for the growing forest are given. At the same time as the optimal rotation is derived, a managerial decision on the optimal time for the first thinning is allowed for; and the interdependence of the two decisions is discussed. Finally, the management of the forest is treated as a continuous process when the problem is to determine at each point in time the optimal act to be undertaken, e.g. the amount of thinning together with the determination of optimal rotation. Since restrictions, such as limited funds, limited manpower, or the fact that the physical amount of thinning cannot be negative or larger than the available amount of timber, might be imposed, the problems must be solved subject to side conditions. These conditions are often functions of the decision variable. The possibility of using the solution as a device for decentralized decision making in a forest enterprise is discussed.

Keywords: Maximum principle; capital budgeting; financial maturity; investment

Document Type: Journal Article

Affiliations: Professor, Dep. of Business Administration, Stockholm University

Publication date: 1969-12-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Average time from submission to first decision: 62.5 days*
    June 1, 2016 to Feb. 28, 2017

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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