Economic Risk Modeling in Forestry Projects Using Harvesting and Transportation Cost Variables

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Abstract
This study evaluated the economic viability and risk of a eucalyptus forestry project by integrating deterministic and probabilistic economic analyses. Operational costs for motor–manual harvesting, manual extraction and loading, and forest transportation were estimated using standard cost models, while silvicultural, road maintenance, and transportation costs were obtained from operational records. Economic viability was assessed using Net Present Value (NPV), Internal Rate of Return (IRR), Equivalent Annual Value (EAV), and Average Production Cost (APC). Economic risk was evaluated through Monte Carlo simulation (10,000 iterations), considering ±10% variation in interest rate, transportation distance, harvesting productivity, labor, fuel, lubricant, and road maintenance costs, followed by sensitivity and correlation analyses. The project was economically viable, presenting an NPV of USD 110.11 ha−1, an IRR of 8.0%, an EAV of USD 20.43 ha−1 year−1, and an APC of USD 29.11 m−3. Transportation distance showed a limited operational slack of only 10 km when land cost was considered, indicating that the project operates close to its economic limit. Monte Carlo simulation indicated an 11.5% probability of economic infeasibility, while interest rate, transportation distance, and manual loading cost exerted the greatest negative influence on NPV. The integrated deterministic and probabilistic approach enabled the identification of critical operational thresholds for transportation distance, timber price, wood productivity, and land cost under the evaluated conditions, providing practical decision-support parameters for transportation planning, cost management, and economic risk assessment in similar forestry projects.
Funding Information
  • Conselho Nacional de Desenvolvimento Científico e Tecnológico (101806/2024-8)

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