ABSTRACT
This chapter develops and applies a Supply Potential Optimal Control (SPOC) model which examines the potential long-term supply of timber harvests. The model incorporates features that allow it to deal with questions of the economically optimal rate of drawdown of existing old-growth stands, as well as to project the optimum harvest levels after the transition has been completed and a steady state ensues. An optimal control theory algorithm is used to solve the problem. The chapter describes an algorithm for numerically solving for the optimal time path of several control variables in a timber supply/demand model. The objective function for the model is the discounted present value of the time stream of net surplus (consumers' plus producers'). This function is maximized subject to the initial conditions and the laws of motion for the system. The initial conditions include such items as acres of forest by age group and land class.
