Forestry sector development planning: A model for Indonesia

Abstract

A model has been developed to evaluate long-term development strategies for the forestry sector of Indonesia. The model uses data for 26 regions of Indonesia, plus Japan and Singapore. The model consists of a mixed-integer program with goal programming variables. The objective function measures total costs which include harvesting, transportation, manufacturing, capacity expansion and cost of not meeting regional demand and export targets. The model variables represent the different movements of forest products at various stages of processing within and between regions. Goal variables measure deviations from domestic demand targets in each region and from export targets. Boolean variables are used to determine the economic location of one or two ports capable of handling Indonesia's exports to Japan. An application of the model is given to show the effect, keeping other variables equal, of altering the composition of Indonesian exports from logs only to 50% processed products and 50% logs.