Forest Estate Modelling

We support investors and managers the investment cycle, advising on forest management, benchmarking and improvement studies, and inventory modelling and analysis.

In its specialised form, forest estate modeling is a top-down approach to analysing and developing management strategies for forest resources. This type of modeling is also a useful tool to address uncertainty, risk, and other challenges endemic to forestry.An irregular wood flow, for instance, can create logistical challenges at every level, from harvesting and delivery to marketing and financial management. Yet most planted forest estates have irregular age-class distributions – and for these entities, establishing systems and processes to manage irregular wood flows and identify ways to make them more regular can become a financial imperative.

Even simple wood flow model can incorporate large data sets. When extended to include hundreds or thousands of similar age-class/yield table combinations, the computational demands become significant.

Spreadsheet-based models are no longer a viable option and have been replaced by specialised software in our analyses. Most purpose-built programs now employ a linear programming formulation, which enables us to perform regressions on large datasets under credible constraints and produce optimised solutions for forest industry managers.

Indufor innovates and incorporates additional functionality in its forest estate models. These additions generally include:

  • Spatial representation of the forest resource
  • Log type assortments into which the total recoverable yield can be allocated
  • Augmented model parameters extending beyond physical yields and including:
    – financial factors such as unit revenues, production costs and growing costs;
    – environmental and economic parameters such as those involving carbon sequestration, water flow and social impact
  • Identified market access and sale points for various product types with offered prices
  • A representation of the transport network, and the costs of delivery from different parts of the estate to the various market access points
  • Description of market characteristics including supply and demand, and the price elasticity of demand for specified products
  • Incorporation of logistical constraints such as transport routes, harvest system capacities, and nursery supply.

Indufor’s work demonstrates forest estate modelling’s prime importance in forest management, and staff members involved with valuation and forest resource consulting are proficient with the necessary modelling software.

Examples of forest estate model applications include:

  • All valuations produced by the Australian offices employ a forest estate model as the underpinning framework;
  • Forest estate models are a preferred approach when conducting asset due diligence reviews
  • Extensively used for regional wood flow modelling and mill supply planning, among other logistical applications.

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