Local factors and time‐variable parameters in tactical planning models: A tool for adaptive timber procurement planning

Abstract

In solving a wood procurement problem using linear programming, one obtains a static solution that is found simultaneously, for instance, by the Simplex technique. Therefore, general linear programming is useful when dealing with large‐scale and strategical problems. By using the formulations of dynamic linear programming presented in this study, local decision makers are provided with the advantages of an approximation tool for tactical planning situations. The models were used (1) to implement a local approach to tactical planning; and (2) to consider local and time‐variable aspects of wood procurement. In particular, as an example, a local seasonal cost effect is investigated; the results obtained are compared with results obtained by conventional higher level models. Both model structures (conventional and local) covered the same wood procurement system and the same planning horizon, but the procedure developed was more flexible and suitable for multi‐stage planning at the local level. The procedure was not as efficient computationally as the conventional procedure, but future developments in the computer industry can be expected to provide more computational capacity for processing and increasing number of variables. Using the following local procedure developed, the same tactical problem could be solved with higher precision because the system is closer to reality; the magnitude of the dynamic inconsistency was diminished.