Optimization models for forest road upgrade planning

Road blocking due to thawing or heavy rains annually contributes to a considerable loss in Swedish forestry. Companies are forced to build up large stocks of raw material (saw and pulp logs) in order to secure a continuous supply when access to the road network is uncertain. Storage outdoors leads to quality deterioration and monetary losses. Other related costs due to road blocking are road damage and longer haulage distances. One approach to reduce the losses due to road blocks is to upgrade the road network to a standard that guarantees accessibility. We consider the road upgrade problem from the perspective of Swedish forest companies with a planning horizon of about one decade. The objective is to minimize the combined upgrade and transportation costs. We present two mixed integer programming models, which are uncapacitated fixed charge network flow problems including multiple assortments, several time periods and a set of road classes. One model is based on arc flows and one on route flows. For a typical planning instance, the models become large and we propose how to improve solution performance through model strengthening. The models are tested in a case. study for a major Swedish forest company.