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Articles containing the keyword 'cost-benefit analysis'.

Category: Research article

article id 124, category Research article
Johannes Windisch, Lauri Sikanen, Dominik Röser, David Gritten. (2010). Supply chain management applications for forest fuel procurement – cost or benefit? Silva Fennica vol. 44 no. 5 article id 124. https://doi.org/10.14214/sf.124
It is commonly agreed that logistics is very demanding in forest fuel business. Even though logistics and supply chain management (SCM) tools already have found their way into forestry business, for example, in roundwood operations, they are not yet very widespread in the field of forest fuel procurement. The present study investigates if modern supply chain management applications are capable of increasing the profitability of forest fuel procurement operations. Since margins are low, decreasing the provision costs could boost wood-based bioenergy business. The study is based on the investigation of two Finnish forest owners associations (FOA) involved in forest fuel procurement using a modern SCM tool. The investigation is done by cost-benefit analysis (CBA) using the net present value (NPV) methodology to determine the profitability. According to the estimates made by the staff, which are based on data such as work time records and delivery notes from before and after introduction of the new system, in both FOAs, the benefits far outweigh the costs over a considered timespan of ten years. However, the amount of the NPV varied significantly. For FOA1, with an annual chip production of 150 000 loose m3, the NPV is 212 739 euro, while for FOA2, with an annual chip production of 37 000 loose m3, the NPV is 969 841 euro. Even if the NPV of FOA2 seems to be very high, the profitability of SCM tools in forest fuel procurement is clearly demonstrated. Additionally, the results indicate that a considerable cost saving potential in forest fuel procurement is attainable through improving work flows and thus reduce the work input.
  • Windisch, Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland ORCID ID:E-mail: johannes.windisch@metla.fi (email)
  • Sikanen, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland ORCID ID:E-mail:
  • Röser, Finnish Forest Research Institute, Joensuu Research Unit, Yliopistokatu 6, P.O. Box 68, FI-80101 Joensuu, Finland ORCID ID:E-mail:
  • Gritten, University of Eastern Finland, School of Forest Science, Yliopistokatu 7, P.O. Box 111, FI-80101 Joensuu, Finland ORCID ID:E-mail:

Category: Article

article id 7503, category Article
Anssi Niskanen, Olavi Luukkanen, Olli Saastamoinen, Suree Bhumibhamon. (1993). Evaluation of the profitability of fast-growing tropical trees. Acta Forestalia Fennica no. 241 article id 7503. https://doi.org/10.14214/aff.7503

The profitability of fast-growing trees (Eucalyptus camaldulensis Dehnh., Acacia mangium Willd. and Melia azedarach L.) was investigated in the north-eastern and eastern provinces of Thailand. The financial, economic, and tentative environmental-economic profitability was determined separately for three fast-growing plantation tree species and for three categories of plantation managers: the private industry, the state (the Royal Forest Department) and the farmers. Fast-growing tree crops were also compared with teak (Tectona grandis L. f.), a traditional medium or long rotation species, and Para rubber (Hevea brasiliensis (Willd. ex A. Juss.) Müll. Arg.) which presently is the most common cultivated tree in Thailand.

The optimal rotation for Eucalyptus camaldulensis pulpwood production was eight years. This was the most profitable species in pulpwood production. In sawlog production Acacia mangium and Melia azedarach showed a better financial profitability. Para rubber was more profitable and teak less profitable than the three fast-growing species. The economic profitability was higher than the financial one, and the tentative environmental-economic profitability was slightly higher than the economic profitability.

The profitability of tree growing is sensitive to plantation yields and labour cost changes and especially to wood prices. Management options which aim at pulpwood production are more sensitive to input or output changes than those options which include sawlog production. There is an urgent need to improve the growth and yield data and to study the environmental impacts of tree plantations for all species and plantation types.

The PDF includes a summary in Finnish.

  • Niskanen, ORCID ID:E-mail:
  • Luukkanen, ORCID ID:E-mail:
  • Saastamoinen, ORCID ID:E-mail:
  • Bhumibhamon, ORCID ID:E-mail:
article id 7672, category Article
Herman Hakala. (1992). Mäntytukkien sahauksen järeyden mukainen taloudellinen tulos ja siihen vaikuttavia tekijöitä. Acta Forestalia Fennica no. 226 article id 7672. https://doi.org/10.14214/aff.7672
English title: Financial result of sawing Scots pine logs as influenced by top diameter and other associated factors.

The influence of log properties (diameter, length, taper, volume, density and quality), sawing pattern, yield, sawing efficacy, stoppages, consumption of electric power and thereby on the financial result of sawing was examined. In addition, the significance of various revenues and costs were studied from the point of view of the financial result of sawing. The revenues from sawing are composed of revenues obtained from sawn goods, chips, sawdust and bark. The costs in sawing are made of raw material, capital, labour, energy and other costs. The results were calculated per diameter class and applying the basic principle of targeting all returns and costs on the different diameter classes.

The results are based on test sawings of a total of 1,606 Scots pine logs representing eight diameter classes,  using conventional frame saw sawing patterns. In addition, a sawing simulator was used. Log top diameter had a significant influence on the financial result obtained when calculations were made per log volume. The financial result obtained for the biggest diameter class exceeded that of the smallest diameter class by FIM 99.1/m3. Sawing revenues accounted for FIM 66.0/m3 and sawing costs for FIM 33.1/m3 of this difference. In addition to being influenced by the top diameter, the yield and sawing efficacy were observed to have a clear influence on the financial result. The influence of stoppages was smaller.

The only means of gaining significant improvement in the annual result obtained from sawing were improvements in the revenues from sawn goods or reductions in the cost of raw material. Increase of the minimum diameter led to a significant improvement in the annual result obtainable from sawing only if the production time remained unchanged; i.e., when correspondingly more logs from the other diameter classes were sawn. If the production time was reduced by an amount corresponding to the increase in minimum diameter, then the annual result fell dramatically except in the case of minimum diameter.

The PDF includes a summary in English.

  • Hakala, ORCID ID:E-mail:

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