How to Optimize

When a forest description is imported, and it is set to 'Automatically optimize after importing' then the software will start the optimization process. This can be halted by clicking the button Cancel. Otherwise after selecting an existing forest description, click the Optimization menu item to continue.

Standard Optimization Process


There are two parameters that need to be reviewed and set prior to optimization. These are:

  1. The primary year in the first period of the model, and;

  2. The discount rate used in the objective function



Set The Primary Year In The First Period Of The Model

This value determines the age of all the planning units (plunits) in the first period (and subsequent periods) of the forest estate model. Every plunit with stocked area at the outset of the forest estate model also has year of establishment (YOE) defined by convention in the worksheet 'Plunits'.

The software has been specifically designed to require a plunit's YOE be provided as part of the forest description. This enables easier auditing of the forest description because a plunit's YOE is somewhat immutable and can be matched to other forestry records for cross-checking.

The primary year in the first period of the model (Period 1), minus a plunit's YOE, equals the plunit's age in the first period of the model.

That is:

Primary Year in Period 1 - Plunit's YOE = Plunit's Age in Period 1

The simplest way to decide on the appropriate value for the optimization parameter 'Primary Year in the First Period of the Model' is to consider all the plunits that are to be established in the first period of the model (Period 1). These plunits by definition need to be Age 0 in Period 1. Therefore the 'Primary Year in the First Period of the Model' must be equal to the YOE of the plunits that need to be Age 0 in Period 1.

For example:

Plunit YOE = 2016.  This plunit must be Age 0 in Period 1.  Therefore Primary Year = 2016.

It then follows for another example plunit with a YOE of 1990 that:

Plunit YOE = 1990.  The Primary Year in Period 1 = 2016.  This plunit is Age 26 in Period 1.



Set The Discount Rate Used In The Objective Function

The optimization parameter 'Discount Rate Used in the Objective Function' is simply the discounting factor used to determine the net present value (NPV) of the objective function during the optimization process.

This discount factor is applied at the mid-point of the period, by definition aligning with the expected average yield defined collectively for the estate across the same period.

Begin The Optimisation

Click the Start button to begin the optimization process. It can also be cancelled at any time.



The optimization process has three distinct phases:

  1. Forest description data extraction, checking and structuring.

  2. Mixed integer mathematical model preparation, factorization and scaling.

  3. Maximization of the objective function value using linear programming software.

The optimization will continue through to completion and the optimal solution will be extracted and stored in the database for charting and consolidated data extraction for further reporting using the standard templates. At the completion of a successful optimization then following screen will be shown.



Other Optimization Options


TRRRRR

Exclude Financial Objectives and Maximize Volume

The default objective function is the maximization of the net present value (NPV) of the entire forest estate. It is possible to exclude the financial objective function and only maximize the net present volume produced by the forest estate.

To maximizing volume within the forest estate model check the box labelled 'Maximize volume and ignore financial objective' as shown below. It is also possible to further limit the volume being maximized to either clearfell volume, production thinning volume or both.



Exclude Indexation from Objective Function

It is possible to choose to exclude the effect of log price indexation in the objective function of the optimization model. This is useful when users want to optimize the model using the base log pricing in the forest description in each and every modelling period, ignoring any indexation that has been supplied within the forest description on the worksheet 'Index'.

The software default is to include all real log price indexation in the objective function. Deselecting the check box shown below will exclude the effect of log price indexation from the optimization.



Exclude First Period Planting from Current Rotation

By default any planning unit that is planted in the first period of the forest estate model is considered part of the Current Rotation of forest. that is, a plunit that is Age 0 across Period 1 of the model will be considered part of the known forest description and therefore part of the current rotation of the estate.

If the portion of the forest estate that is Age 0 in Period 1 needs to be excluded from the Current Rotation and reported as being part of the Future Rotations of forest then the check box shown below can be unchecked.

If this check box below is not unchecked then all Age 0 planning units in Period 1 will be excluded from the wood flows and cash flows that will be reported as being Current Rotation.



Exclude Plunits and Log Grades from Data Checking





Using Pre-Release Routines for Optimization"

It is possible to use and test pre-release routines for optimization and reporting. These processing routines are post-beta testing, and pre-release, at which time they become the software default. These types of routines are included for user testing because they offer significant processing improvement when used with forest estate models that have extremely large numbers of plunits.

To use the the pre-release routines for optimization and reporting click the label Advanced Options and then check the box labelled Use pre-release routines for solving and reporting.