A hierarchical planning system to assess the impact of operational-level flexibility on long-term wood supply

Operational-level flexibility in the choice of silvicultural treatments allows mitigatation of the impact of uncertain demand on supply chain performance. Silvicultural treatments dictate the species and quantity harvested from forest stands. However, their impact on wood supply sustainability is not clearly understood. This study proposes a simulation–optimization system to model hierarchical forest management planning with an objective to examine the impact. The system consists of mathematical models to develop hierarchical plans, i.e., strategic, tactical, and operational. In the system, the strategic model is first solved to determine the annual allowable cut. Next, the tactical model allocates cutblocks to annual plans, also prescribing silvicultural treatments. The subsequent operational-level model generates monthly plans in a rolling planning basis to satisfy prevailing demand. Upon execution of all operational-level plans, the forest inventory is updated and the change in annual allowable cut is evaluated. The system was implemented in a case study in Quebec, Canada. Permitting silvicultural flexibility at the operational level led to profit improvements between 2% and 3.7% over a 100 year horizon. Significant impact on long-term wood supply was not observed in this case. The proposed system can help forest planners and supply chain managers better integrate their respective needs.