Integrated harvest and logistic planning including road upgrading

This paper provides an integrated model for harvesting and logistic planning for tactical purposes over several years. The logistic planning includes both road upgrading and transportation between harvest areas and industries. The former is particularly important when dealing with problems when the accessibility of the road network is low due to, for example, thawing and heavy rains. The optimization model uses a detailed description of harvest areas including their spatial location, volume output of different assortment computations and net present value (NPV) for each year in the planning horizon. The model also uses a detailed description of the road network using the Swedish national road database. The model is very large and hard to solve, and hence, we are developing a solution approach based on an aggregation technique. An important part of the planning process is to select areas for the next 5 years, for example, and we analyze three different approaches. One approach is based on maximizing the NPV of the forest value, that is, the value at roadside. The second one is based on minimizing the logistic cost, and the third one combines NPV of the forest value at roadside and logistic. We analyze differences in a case study with over 6000 areas from the Swedish forest company Sveaskog. The results show that an integrated approach is necessary in order to avoid sub-optimal solutions.