Strategic forest planning and operational decisions under uncertainty

A lack of certainty about future forest growth or market conditions may lead to substantial variations in optimal strategic management and projected net value of a commercial forest. Optimal operation decisions, such as decisions to develop a road network or other infrastructure in the immediate future to support expected harvesting or other actions, would also be affected substantially by a lack of certainty about future conditions. This paper describes a practical approach to combining yield models with stochastic variation by forest type and period in a large number of scenarios to produce a distribution of optimal, long-term harvest schedules. The approach allows robust operational decisions to be identified that are appropriate under a wide range of uncertain future conditions. The approach also allows the development of logistic regression models that relate operational decisions to variation in future growth or market conditions. A case study is provided to demonstrate operational decisions on roading and infrastructure development in the immediate or operational period that are robust, and those that would depend on decisions made by a manager who is risk- adverse, risk-neutral or a risk-taker.