Reference no: EM132269115

The state of Virginia is one of the largest producers of wood furniture in the United States with the furniture industry accounting for 50% of value added to wood materials. Over the past 40 years the inventory volume of wood in Virginia is for us to have increased by 81%. Today 15.4 million acres, which is well over half of the state, is covered in forest. Private owners hold 77% of this land. When making decisions about which trees to harvest, forestry professionals consider many factors and most allowed numerous laws and regulations. The figure below depicts a tract of forest land that has been sectioned off into 12 harvestable areas indicated by dashed lines. Area 2 provides the only access to the forest via a paved road so any timber cut must ultimately be transported out of the forest through Area 2. Currently there are no roads through this forest so to harvest the timber forest roads will need to be built. The allowable routes for these roads are also shown in the figure below and or determined largely based on the geography of the land and location of streams and wildlife habitats. Not all areas of the forest have to be harvested. However to harvest any area a forest Road must be built to that area. The cost of building each section of forest road in thousands of dollars is indicated in the figure below. The state of Virginia is one of the largest produc Finally the net value of the harvestable timber in each area is estimated as follows: Harvested Value (in thousands of dollars) Area 1 2 3 4 5 6 7 8 9 10 11 12Value $15 $7 $10 $12 $8 $17 $14 $18 $13 $12 $10 $11 Which areas should be harvested and what road should be built to make the most profitable use of this forest? 1.) Create a spreadsheet model for this problem. 2.) What is the optimal solution? 3.) Suppose the cost of building the road connecting areas 4 and 5 dropped to $12,000 what impact does this have one optimal solution?