Optimal managing of forest structure using data simulated optimal control

We analyze the deterministic infinite time horizon optimal control model aimed to determine optimal areas forested by particular tree species in Drahanska highlands in the Czech Republic. Facing the limitations in original data available we suggest a simulation technique to generate valid full scope data and to estimate correct underlaying functions. The simulation procedure, based on the experts suggestions and comments, is described in detail and the economic interpretations of the assumptions made are provided. Subsequently, we develop the optimal control model given the nonlinear cost and revenue functions and find its analytical solution. The results obtained are discussed with respect to forestry practice and further application of our model. The presented approach intends to be a valid basement for further thorough study of related dynamical decision problems in the Czech forestry business.