A mathematical model for infrastructure investments in the forest sector of coastal Norway

Forestry in coastal Norway has traditionally been a marginal activity with a low annual harvest rate. However, the region is now faced with large areas of spruce plantations that will reach harvest maturity within the next 25 years. Due to the poor infrastructure in the region, the current challenge is to harvest the maturing spruce plantations at an acceptable cost. Hence, there is considerable interest both from the forest sector and politicians to invest in infrastructure that can provide the basis for profitable forest sector development in coastal Norway. This paper presents a mathematical optimization model for timber transportation from stump to industry. The main decision variables are location of quays, upgrade of public road links, the length of new forest roads, and when the investments should happen. The main objective is to provide decision support for prioritization of infrastructure investments. The optimization model is combined with a dynamical forest resource model, providing details on available volumes and costs. A case study for coastal Norway is presented and solved to optimality. The instance includes 10 counties comprising more than 200 municipalities with forest resources, 53 possible new quays for timber export and 916 public road links that also can be upgraded. Compared with a no investment case, the optimal solution improved the objective by 23%. The study shows that consistent, informative and good analyses can be performed to evaluate trade-offs, prioritization, time and order of investment, and cost saving potentials of infrastructure investments in the forest industry. The solution seems reasonable based on present infrastructure and state of the forest.