FOR302 – Forest Valuation, Croptyping & Tactical
Planning | Lecture and Revision Summary | Forestry
Economics and Management
What are the advantages of using croptypes? - Reduces planning size, less yield info, quicker
models, easy what-if analysis, enhances big-picture focus.
What are the disadvantages of using croptypes? - Loss of detail, assumes same yield for all
stands in croptype.
How does variable resolution croptyping overcome disadvantages? - Aggregates young stands,
keeps older stands unique, balances short-term detail with long-term strategy.
What are the 3 common approaches to forest valuation? - Sales comparison, Cost, Income
(DCF/expectation).
Describe the Sales comparison method. - Uses market transactions, interpolates or extrapolates to
target forest.
Describe the Cost method. - Historic or current costs, compounding to replacement
cost.
Describe the Income (DCF) method. - NPV of forecasted cashflows based on
management/harvest strategy.
Which valuation approaches are most used in NZ? - DCF with transaction evidence; Cost for
young forests with narrow age-classes.
What are the pros and cons of simulation in yield regulation? - Simple, shows outcomes,
includes judgement, trial/error, not guaranteed best strategy.
, What are the pros and cons of optimisation in yield regulation? - LP-based, gives best strategy,
explicit constraints, fast, what-if analysis; but can be infeasible or over-reliant on
model.
What is volume control? - Specifies constant harvest volume to regulate forest during
transition.
Main advantage and disadvantage of volume control? - Advantage: constant yield. Disadvantage:
may not transition to target forest.
What is Equivalent Normal Forest (ENF)? - Constant harvest leads to one achievable normal
forest; provides benchmark not a target.
What does ENF Volume represent? - The constant annual harvest volume that converts current
forest into normal forest.
What are traditional measures of forest mass and maturity? - Growing stock volume (mass),
Average stand age (maturity).
What are decision variables in tactical harvest planning? - Area of each stand to cut each
year.
What is the objective function in tactical harvest planning? - Maximise NPV.
What constraints are in tactical harvest planning? - Cashflow, market, equipment, access,
transport, wood density, environmental.
How are environmental constraints applied? - Catchment % harvest limits, adjacency
constraints.
How is yield info derived for tactical planning? - Pre-harvest inventory + growth
models.
How does tactical planning link to long-term model? - Long-term provides annual volume,
tactical chooses stands for near term.
Planning | Lecture and Revision Summary | Forestry
Economics and Management
What are the advantages of using croptypes? - Reduces planning size, less yield info, quicker
models, easy what-if analysis, enhances big-picture focus.
What are the disadvantages of using croptypes? - Loss of detail, assumes same yield for all
stands in croptype.
How does variable resolution croptyping overcome disadvantages? - Aggregates young stands,
keeps older stands unique, balances short-term detail with long-term strategy.
What are the 3 common approaches to forest valuation? - Sales comparison, Cost, Income
(DCF/expectation).
Describe the Sales comparison method. - Uses market transactions, interpolates or extrapolates to
target forest.
Describe the Cost method. - Historic or current costs, compounding to replacement
cost.
Describe the Income (DCF) method. - NPV of forecasted cashflows based on
management/harvest strategy.
Which valuation approaches are most used in NZ? - DCF with transaction evidence; Cost for
young forests with narrow age-classes.
What are the pros and cons of simulation in yield regulation? - Simple, shows outcomes,
includes judgement, trial/error, not guaranteed best strategy.
, What are the pros and cons of optimisation in yield regulation? - LP-based, gives best strategy,
explicit constraints, fast, what-if analysis; but can be infeasible or over-reliant on
model.
What is volume control? - Specifies constant harvest volume to regulate forest during
transition.
Main advantage and disadvantage of volume control? - Advantage: constant yield. Disadvantage:
may not transition to target forest.
What is Equivalent Normal Forest (ENF)? - Constant harvest leads to one achievable normal
forest; provides benchmark not a target.
What does ENF Volume represent? - The constant annual harvest volume that converts current
forest into normal forest.
What are traditional measures of forest mass and maturity? - Growing stock volume (mass),
Average stand age (maturity).
What are decision variables in tactical harvest planning? - Area of each stand to cut each
year.
What is the objective function in tactical harvest planning? - Maximise NPV.
What constraints are in tactical harvest planning? - Cashflow, market, equipment, access,
transport, wood density, environmental.
How are environmental constraints applied? - Catchment % harvest limits, adjacency
constraints.
How is yield info derived for tactical planning? - Pre-harvest inventory + growth
models.
How does tactical planning link to long-term model? - Long-term provides annual volume,
tactical chooses stands for near term.
