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Silva Fennica 1926-1997
Acta Forestalia Fennica

Articles containing the keyword 'net present value'

Category: Article

article id 5574, category Article
Jouni Vettenranta. (1996). Effect of species composition on economic return in a mixed stand of Norway spruce and Scots pine. Silva Fennica vol. 30 no. 1 article id 5574.
Keywords: Pinus sylvestris; Picea abies; net present value; mixed forests; growth models; tree species composition; forest management practices; felling methods; valuation; soil expectation value; treatment programme
Abstract | View details | Full text in PDF | Author Info

The effect of species mixture was studied in a mixed stand of Norway spruce (Picea abies (L.) H. Karst.) and Scots pine (Pinus sylvestris L.) by simulating around 100 different treatment schedules during the rotation in a naturally regenerated even-aged stand located on a site of medium fertility in North Karelia, Finland. Both thinning from below and thinning from above were applied. Optimum rotations were determined by maximising the net present value calculated to infinity and different treatment schedules were compared with the net present value over one rotation as per rotation applied. In the optimum treatment programme, the proportion of pines was decreased by half of the basal area in the first thinning stage and by the end of the rotation to about one third. In thinning from above, the proportion of pines can be maintained at a slightly higher level. It is economically profitable to maintain the growing stock capital at approximately the level recommended by Forest Centre Tapio, a semi-governmental forestry authority. With non-optimum species composition, the loss in net present value over one rotation can be about 10 % in thinning from below and about 20 % in thinning from above.

  • Vettenranta, E-mail: jv@mm.unknown (email)
article id 5191, category Article
Juha Lappi. (1983). Metsänuudistamisen vaatiman ajan merkitys uudistamispäätöksissä. Silva Fennica vol. 17 no. 3 article id 5191.
English title: Elevation of the time factor in reforestation decisions.
Original keywords: metsänuudistaminen; metsäsuunnittelu; kustannukset; uudistamisen viivästyminen; uudistumisaika; normaalimetsälaskelma; nollakorkomenetelmä; päätehakkuuikä; nykyarvomenetelmä
English keywords: forest planning; net present value; forest regeneration; cost of time delay; regeneration costs; final cutting age; regeneration method; zero percent interest rate
Abstract | View details | Full text in PDF | Author Info

Length of the regeneration period is a criterion commonly used for comparing different reforestation methods. The time factor should be evaluated using a realistic system for long-term planning. In this paper the preliminary evaluation is made by simplified calculations based on the development series. The slow regeneration method is assumed to be otherwise equal to the rapid one but it has a 5- or 10-years delay at the beginning, and the rotation is thus the final cutting age plus 5- or 10-years delay. Cost of the time delay is taken to be the difference in reforestation costs that makes the rapid and the slow methods equivalent. Calculations are made using zero costs for the slow method; but if the cost of the slow method increases, the critical cost difference decreases very slowly. The final cutting age and the regeneration method must be decided simultaneously. Therefore, the cost of the time delay is presented as a function of final cutting age. By maximizing the average annual revenue, rotation can be even increased if more rapid but more expensive regeneration method is used.

The PDF includes a summary in English.

  • Lappi, E-mail: jl@mm.unknown (email)

Category: Research article

article id 335, category Research article
Markus Holopainen, Mervi Talvitie. (2006). Effect of data acquisition accuracy on timing of stand harvests and expected net present value. Silva Fennica vol. 40 no. 3 article id 335.
Keywords: forest inventory; laser scanning; digital aerial photographs; digital photogrammetry; net present value; expected net present value loss
Abstract | View details | Full text in PDF | Author Info
Modern remote sensing provides cost-efficient spatial digital data that are more accurate than before. However, the influence of increased accuracy and cost-efficiency on simulations of forest management planning has not been evaluated. The aim of the present study was to analyse the effect of data acquisition accuracy on standwise forest inventory by comparing the accuracy and cost of traditional compartmentwise inventory methods with 2D and 3D measurements of digital aerial photographs and airborne laser scanning. Comparison was based on the expected net present value (NPV), i.e. economic losses that consisted of the inventory costs and incorrect timings of treatments. The reference data, totalling 700 ha, were measured from Central Park in the city of Helsinki, Finland. The data were simulated to final cut with a MOTTI simulator, which is a stand-level analysis tool that can be used to assess the effects of alternative forest management practices on growth and timber yield. The results showed that when inventory costs were not considered there were no significant differences between the expected NPV losses in 3D measurements of digital aerial photographs, laser scanning and the compartmentwise method. When inventory costs were taken into account, the compartmentwise method was still the most efficient inventory method in the study area. Forest inventories, however, are usually directed to larger areas when the costs per hectare of remote-sensing methods decrease. As a result of better accuracies, 3D and compartmentwise methods always produce better results than the 2D method when NPV losses are accounted. Simulations of this type are based on the accuracies and costs of the 3D data available today, assuming that the data can be used in tree-level measurements.
  • Holopainen, University of Helsinki, Department of Forest Resource Management, P.O. Box 27, FI-00014 University of Helsinki, Finland E-mail: (email)
  • Talvitie, University of Helsinki, Department of Forest Resource Management, P.O. Box 27, FI-00014 University of Helsinki, Finland E-mail:
article id 633, category Research article
Tron Eid. (2000). Use of uncertain inventory data in forestry scenario models and consequential incorrect harvest decisions. Silva Fennica vol. 34 no. 2 article id 633.
Keywords: forest management; uncertain inventory data; final harvest decisions; expected net present value-losses; inventory planning
Abstract | View details | Full text in PDF | Author Info
Uncertainty in long-term timber production analyses usually focus success of regeneration, growth/mortality of trees and future fluctuations of timber prices/harvest costs, while uncertainty related to inventory data is paid less attention. At the same time, evaluations of inventory methods usually stop when the error level is stated, while the uncertainty accompanied by using the data is seldom considered. The present work addresses uncertain inventory data in long-term timber production analyses. Final harvest decisions, i.e. possible outcome intervals with respect to timing and expected net present value-losses due to incorrect timing, were considered. A case study was presented where inventory data errors according to different error levels were generated randomly. The selected error levels were based on observations from practical forest inventories in Norway. The analysis tool was GAYA-JLP. The impact of errors on decisions was derived through repeated computations of management strategies maximising net present value without harvest path constraints. A real rate of discount of 3% and an error level of 15% resulted in expected net present value-losses of 1 NOK ha–1 for basal area, 63 NOK ha–1 for mean height, 210 NOK ha–1 for site quality, 240 NOK ha–1 for stand age, and 499 NOK ha–1 when random errors occurred simultaneously for all these variables. The expected net present value-losses varied considerably. The largest losses appeared for stands with ages around optimal economical rotation ages. The losses were also relatively large for young stands, while they were relatively low for overmature stands. The experiences from the case study along with considerations related to other sources of uncertainty may help us to get a more realistic attitude to the reliability of long-term timber production analyses. The results of the study may also serve as a starting point in a decision oriented inventory planning concept, in which alternatives for inventory design and intensity are based on considerations with respect to inventory costs as well as net present value-losses.
  • Eid, Department of Forest Sciences, Agricultural University of Norway, P.O. Box 5044, N-1432 Ås, Norway E-mail: (email)

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