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MATERIALS 55
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Transportation costs were incorporated into the economic skewness, kurtosis, and percentiles.
model based on transportation distance, freight costs, road Measures of central tendency and dispersion were used to
maintenance, and operational information. evaluate the expected economic performance and the variability
Threshold values were obtained by progressively varying among the simulated scenarios.
transportation distance, wood productivity, timber price, and land
cost in the deterministic cash-flow model until the economic Economic Viability And Operational Thresholds

viability limits were reached (NPV = 0, IRR = 7 percent). Considering scenario 1 (with land costs), the project proved
The economic viability indicators were determined for two viable, with a profit of USD 110.11 ha⁻¹ for a seven-year
scenarios: scenario 1 with land costs (market land value of cycle (NPV), resulting in annual net revenues of USD 20.43
USD 1,500.00 ha⁻¹), and scenario 2 without land costs. ha⁻¹ year⁻¹ (EAV). The timber price (USD 29.61 m⁻³) exceeded
the average production cost (APC) by only USD 0.50 m⁻³,
Probabilistic Analysis Using Monte Carlo Simulation demonstrating a small profit margin per cubic metre of timber
For the economic risk modelling, 10,000 iterations were delivered to the mill.
performed using the Monte Carlo method, considering the The Internal Rate of Return exceeded the adopted interest
following input variables: interest rate, fuel and chain lubricant rate (7.00 percent per year) by only 1.00 percent, demonstrating

costs, labour cost (felling, extraction, and loading), forest the project's limited attractiveness.
transport distance, road maintenance, and motor-manual The threshold analysis for scenario 1 showed a maximum
cutting productivity. transportation distance of 148 km, minimum wood production
Fluctuations of ±10 percent were projected for input variables. of 248 m³ ha⁻¹, and minimum timber price of USD 28.98 m⁻³.
The triangular distribution was adopted because no Scenario 2 (without land costs) showed a maximum
historical data were available for the input variables, which transportation distance of 219 km, minimum wood production
allows flexibility regarding the degree of asymmetry. The Net of 196 m³ ha⁻¹, and minimum timber price of USD 24.22 m⁻³.

Present Value indicator was adopted as the output variable A slack of only 10 km was observed for transportation
for assessing economic risk. distance in scenario 1, indicating that the project is very close to
the maximum radius (forest-to-factory). When disregarding land
Sensitivity, Correlation And Statistical Analyses cost (scenario 2), the project showed a slack for transportation
Sensitivity and correlation analyses were performed to identify distance of approximately 81 km.
the relative influence of the input variables on the NPV Forest production showed a cushion of only 7.50 m³ per
generated by the Monte Carlo simulation.
Sensitivity analysis was conducted by evaluating the
percentage variation in NPV resulting from standardised

changes in each input variable.
Correlation analysis was performed using Pearson's Bureau of Land Management Oregon and Washington
correlation coefficients calculated between the simulated input
variables and the resulting NPV values.
Descriptive statistical analyses were performed to characterise
the distribution of the simulated NPV values, including minimum,
maximum, mean, median, variance, standard deviation,