The development and implementation of a simulation based forest planning model is reported in this document. The model is designed to help a forest manager choose the schedule of harvesting, other silvicultural, and road building activities that maximize the contribution of a forest area to the present net worth of the company managing the area. It is assumed that the forest products company faces rigid mill capacity constraints. The theory of forest rotation is used to identify the costs and benefits of delaying the harvest of forest stand aggregates. In each period, stand aggregates are sorted by descending net cost of delay per cubic metre. Harvest proceeds down this harvest priority list until the volume request for the period is satisfied. Harvested stands are assigned to the management regime that maximizes the present net worth of the next rotation. Stand aggregates in inaccessible areas are not harvested, but the net costs of delaying harvest and regeneration for these aggregates are used to provide the analyst with an indication of priority areas for access development. The analyst chooses a number of roading projects to evaluate for each period: the project where the difference between the costs of delay avoided by harvest and the interest costs of the roading project is the greatest is selected as the best roading project for the period. The model is applied to a forest management licence agreement area in Saskatchewan. The study demonstrates the application of the model to a forest planning problem. The sensitivity of the model to changes in discount rate and period length is examined. The importance of sorting the harvest priority list by net cost of delay per cubic metre and not cost per hectare is demonstrated. The model developed here is useful for forest planning under a wide variety of institutional and market structures realted to the harvesting and processing of wood fibre. A companion document to this report entitled "A Forest Planning Simulation Model: User's Guide" describing the use of the model is available


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