ft MODEL OF THE SOUTH WESTLAND FORESTRY REGION

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1 Proceedings ORSNZ August 1982 ft MODEL OF THE SOUTH WESTLAND FORESTRY REGION TREVOR R. ETON NiZi FOREST SERVICE, WELLINGTON ; JOHN A. GEORGE UNIVERSITY OF CANTERBURY, CHRISTCHURCH, Summary This model his been developed to optimise between various resource related options within the forestry sector of South Westland. It is a policy aid model designed to analyse the effects of these options on employment, finance and the longterm future of indigenous forestry in the region. It is a medium s i z e d linear programming model of some 1000 variables and constraints, generated by MODELLER on Burroughs B6900 at the computer Centre at Canterbury* 1. Introduction: The future of South Westland Forestry is a conversial and complex issue. Contracts have been let for milling of native timber until about Recent government decisions have been taken to plant exotics in the region. The problem, in general terms, is to compromise between the demands of economy, conservation, employment and the supply of certain types of timber. As part of a study of the future of the South Westland forestry region a linear programming model has been developed to test the feasibility of various options and provide some framework in which to look for the "optimal" solution. This model is an aid to understanding the interactions of the system. At this point in time it has not been fully developed and further refinements have yet to be made. 2. Model Details: Two objectives of the decision process are the maintenance of employment levels and the minimum cost (or maximum return) production schedule. These by no means tell the whole story and the possibility is being investigated of finding some suitable multiple objective formulation to tradeoff between these potentially conflicting aims.

2 74 The constraint set includes (i) (ii) exotic and indigenous planting constraints exotic and indigenous cultivation constraints (iii) exotic and indigenous re-establishment constraints (iv) exotic felling constraints (v) indigenous sustained-yield felling constraint (after 1990) (vi) mill capacity constraints (vii) processing constraints (viii)employment constraints (ix) end-use constraints Sub-models exist for (a) (b) (c) (d) Indigenous forest management. Exotic forest management. Sawmills. End product production and marketing. These are joined by variables and relationships that reflect the natural relationships between these sectors. The model consists of a number of "sub-models or sub-sections, which separate the system into its various logical sections. Variables have been either expressed in units per cubic metre or units per hectare. Of course, changes or modifications made to any sub-model will reflect in changes in one or all of the other sub-models. The main areas that will initiate flow-on effects are demand, resource-supply variable changes, and production capacity. The general assumptions behind the model are (1) that the present industry represents the "core" of the model and policy decisions made since 1980 are taken into account within the model. (2) that future processing options developed reflect realistic alternatives subject to social and resource considerations. (3) that after 1990 the indigenous resource will be utilised under a sustained yield, working circle regime. (4) that an exotic forest plantation will be established, maintained and harvested to secure an alternative supply to the indigenous

3 75 resource. Present grading rules for indigenous sawn timber may be modified to improve the recovery of high grade timbers as part of a restructured pricing system. The mathematical details of the model are in the Appendix. 3. Comment: The model presented here is the consequence of a desire by the Forest Service to incorporate the use of O.R. within sector planning. For a region like South Westland, the application of O.R. is particularly suitable since that region presents the model maker with numerous resource, processing and marketing options. As with model-building in <. general, the availability and quality of data has been a continual problem. This has been overcome in the majority of instances, by making careful assumptions on various co-efficients and relationships. These will be amended as better data and a better understanding of the situation is obtained. As a policy aid tool/ the'model'has gone a long way to presenting the decision-maker with a suitable platform from which to make crucial planning related decisions. Sensitivity analysis on these policy runs make it possible for resource-sensitive and cost-sensitive options to be re-run as the need arises. References:. [1] Bertram I. G., and M. O'Brien, "Optimal Pricing Policy and Indigenous 'Forest Management in Hew Zealand", Paper presented to 49th ANZAAS Conference, Auckland, January [2] Chavasse, C. G. R., "Production Values of Native Forests - Water, Wood, Animals and Tourism", N.Z. Jl. For., 23(2) 1978, pp [ 3] Development Finance Corporation, Forest Industry Study, March [4] Foley, T. A., and R. K. Bagriall, "Opportunities for the Improved Use of Beech and Podocarp Sawn Timber and Veneers", Paper presented to New Zealand Forest Service Seminar on the Future of West Coast Forest and Forest Industries, Hokitika, 27 June-1 July I 5] Grant, R. K., "Impact of Log Small-End Diameter on the Cost of Sawn Timber: Case Study of a Small Bandmill", N.Z. Jl. For., 22(2) 1977, pp f6] Griffiths, A. D., "Stand Volume and Growth in North Okarito and Saltwater State Forests, South Westland ", Forest Research Institute Report No. 27, September 1980.

4 76 [ 7] McDermott Associates, West Coast Resource Development S tudy, July [8] New Zealand Forest Service and Ministry of Works and Development, West Coast Dependence on Forestry, November [9] New Zealand Forest Service, 1980 Annual Logging and Production Survey Report No. 7, Unpublished Report, [lo] New Zealand Forest Service, South Westland Forest Management P roposals, March 1981.

5 77 Appendix: Model Structure. Indigenous Timber Submodel Timber available per period (p) per block (b) (m = mills) Z x}1] < PV all p and b m bmp - pb Sustained yield after period 2 Z x^ 1) < S (BV - Z x,!1! ) all p > 2 and b m bmp - b =1 bmp Total timber available per block Z x/1) < BV, all b Tamp - d Timber species (i) at each mill per period - x (2) + Z IP-t. = 0 all i, m and p mxp, lb bmp Contract volume at each mill Z x ^ < CV all p and m mip pm Exotic Timber Submodels Area planted per period (p) per block (c) each species (t) > EP all t, c and p tcp - tcp Quantity harvested in period per block Sawlogs un - Z (J t(p-k) tcp m temp P (i) V (2) = 0 all t, c and p Small wood (sawlogs)?xsf ^ - w<3> - =0 k=1 t(p-k) tcp tp tp (posts) (chips)

6 78 Sawmill Submodel Sawmill Capacity X x (2) + E J 2) < MC all i ^ mip t temp - mp and p Timber types produced Indigenous (f) Exotics U) y _ ^. mrp a ) - CR mif x mip (2) = 0 all n, p, f and i y -Z CR - 0 all n mtp m t temp, p and t Marketing Submodel Indigenous Exotics E ^mtp t D 5 < - X f* tp Posts and Poles < PP tp - tp Costs and Labour Indigenous in period p logging and restocking Z LC^, K(1) bmp LL. b bmp -

7 79 transport {1> bm ^ m p TL bm xh"l) bmp mill V Z MC x 12). m mip E ML X lv ra mip cost Exotics in period p Management P E XMC.,., (Jj (1 ) t(p-k) tck k=l P (1 ) Z XML,,, (J' t(p-k) tck k=l cost Post and pole production.(3) Z PC t -t tp I PL W <3) t t tp cost Chips production Z CC t * tp E CL J 4) t * tp cost

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