Assessing the importance of detailed forest inventory information using stochastic programming

Errors in forest inventory data can lead to sub-optimal management decisions and dramatic economic losses. Forest inventory approaches are typically evaluated by their levels of precision and accuracy; however, this overlooks the specific usefulness of the data in decision-making. By evaluating the value of information (VoI), we can assess the usefulness of the data for specific decision-making problems. We evaluated the VoI through stochastic programming for four airborne laser scanning-based inventory approaches. The stochastic programming model explored the trade-off between the maximal net present value and the minimal conditional value at risk of meeting specified periodic income targets. We evaluated a range of periodic targets and risk aversion preference levels. To compare the performance of the inventory approaches, we used a reference dataset that was acquired using a forest harvester with precise positioning. For a wide range of the trade-offs, inventory approaches with higher-quality information provided the best overall performance. If only one of the extreme objectives was desired, less precise inventory approaches were sufficient to produce high-quality solutions.