Technodiversity Glossary

When we sell timber on the market, we receive the price of the logs. But we also invest some money to harvest the trees and transport the logs. So only the difference between price and costs, the net income, is available for the company's profit.

Let us assume here, that the price only depends on the qualitative and quantitative attributes of the harvest. Thus, the income mostly is influenced by the system costs. To maximize the income, we need to minimize the total system costs.

Since most harvesting processes are composed by two or more sub-processes, the costs of a total process are given by the sum of the costs of its constituent sub-processes.

But the machines and the operators are charged at an hourly rate. Given this information, we must first calculate the costs per hour. In science, we call this hour PMH₁₅ that means productive machine hour including short interruptions of the work up to 15 minutes. To do this, we use the engineering formula.

In that working hour, the system will process a certain number of products. The ratio between products and time is called system performance. When we know the performance, we can match the costs per hour to the production in order to get the costs per unit of a product.

For timber harvesting, we need to divide the costs per hour by the productivity, that is: m³ per hour.

Machines and employees cost money, whether they work or not. This means that the system will generate a cost even when it is not producing anything. Those additional unproductive times (i.e. more than 15 minutes per hour) and costs that are necessary to production (maintenance, preparation etc.) must also be accounted for. To do this, we add all additional costs and divide them by the total sum of m³ on that specific working site.

Finally the costs of the sub-systems must be added to find the total system costs.

(See more at TDiv PR1-C01)