This issue is about a large area of forest in Virginia, where the volume of lumber has
Question:
This issue is about a large area of forest in Virginia, where the volume of lumber has increased by 81%. This area is approximately 15.4 million acres, 77% of which is privately owned. There are many factors that must be considered when determining which trees to harvest.
Figure 6.36 in the book shows a tract of forested land that has been divided into 12 harvestable areas. Area 2 has the only access to the forest with a paved road, so cut wood must be transported through area 2. There are currently no roads through the forest, so new roads will need to be paved. The routes that are allowed are based on the geography of the terrain and a few other factors. They are also shown in Figure 6.36.
Not all areas of the forest have to be harvested. However, in order to harvest any area, it will be necessary to build a path to that area. The cost of building each section of the road (in $1000) is shown in the figure below. The net value of usable wood in each area is as follows:
Harvested value (in thousands) | ||||||||||||
Area | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
Valor | $15 | $7 | $10 | $12 | $8 | $17 | $14 | $18 | $13 | $12 | $10 | $11 |
Create a spreadsheet model.
What is the optimal solution?
Suppose the cost of building the road connecting areas 4 and 5 was reduced to $12,000. What impact does this have on the optimal solution?
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton