A Systems Analysis Approach to Economic Feasibility Analysis for Forest Products Utilization

-Systemsanalysis is often used in developing forest man­ agement plans and policies. This paper presents a conceptual framework for the systematic evaluation of forest product utilization technology in the context ofthe forest resource system. Emphasis is placed upon evaluating the economic feasibility of forest product utilization as a component of the forest resource management system. This is a conceptual paper rather than a procedural paper. An expanded view of systems analysis is presented in an attempt to broaden thinking about what feasibility analysis means and how evaluation of forest products utilization might be improved-which is what system analysis is all about. The generalized view of systems analysis has been expressed by Casti (1987) as follows: problems + tools + a world view = insight Casti explains that an indispensable role is played by one's scientific Weltanschauung or "world view" in determining the nature and degree of insight that can be gained about any problem. When translating a problem statement into a formal mathematical structure, the world view is represented by the type of formal mathematical system chosen to reflect the features of the problem. In turn, this mathematical world view dictates the questions that can be asked and the tools and techniques that can be used to seek insights and answers (fig. 1). Furthermore, I will explain that a formal mathematical model is not required in every case and that judgment and extra rational variables can be considered because systems analysis is usually a mixture of qualitative and quantitative analysis. The primary purpose of this paper is to recognize that forest product utilization and forest resource management are inexpli­ cably intertwined in the forest resource system. The forest resource system, a set of interacting variables, is part of a larger 1Economist, USDA Forest Service, Forest Products Laboratory, Madison. WI. The Forest Products Laboratory is maintained at Madison, Wl, in cooperation with the University of Wisconsin. system that is the sum of human experience and defines the value of forest resources (Duerr et al. 1979). It is obvious that in order to manage forests economically, timber and other bio­ mass removals must be converted into products that are market­ able at a price higher than the cost of producing the products. To accomplish this, the removals generally go through some type of conversion process. This paper attempts to provide a concep­ tual basis for the development of these broad concepts. I begin by providing a discussion of general system concepts and methodology. Then, I present a conceptual application to the forestry sector. System Analysis Concepts There are probably as many definitions of systems analysis as there are systems analysts. The systems analysis concept presented here departs from previous system analysis literature in that a mathematical systems model does not have to be the central component of the problem solution. The central compo­ nent of analysis may be quantitative, qualitative, or mixed, and it may be an expert person or a computer information system. Methodological tools considered for systems analysis range from behavioral research into what exists, through values research into what is preferred, to normative research into what should be. Research efforts to demonstrate the three fundamen­ tal components of feasibility analysis--economic, technical, and socio-political--are difficult and ephemeral, either taken individually or considered together. Krone (1980) provides a statement ofgeneral system concepts that also reflects my view: