%0 Research article
%T Pricing the risk of the quality-guarantee in a stand establishment service
%A Kiljunen, Nuutti
%D 2005
%J Silva Fennica
%V 39
%N 1
%R doi:10.14214/sf.397
%U https://silvafennica.fi/article/397
%X A stand-establishment service concept with quality guarantee was  analysed. Here, the quality of stand establishment was assessed as the  density of good quality seedlings evenly distributed on the plantation  three years after planting. The amount of adequate premiums for the  guarantee service and the risks accumulating to the service provider  were studied. Monte Carlo simulation was used as a tool for analyzing  the risks accumulating to the service provider of the  stand-establishment in operational environments of different sizes. The  premiums calculated to cover the expected amount of claims caused by the  plantations not meeting the pre-set criteria were about 4–8% in  addition to the approximated costs of stand establishment. The criteria  used for determining the success or failure in a stand have a marked  effect on the amount of premiums with a reasonable risk of ruin.