Resale Credit Error in RILSIM 1.05 and 1.06
It has been determined that the “Resale Credit” adjustment to equipment costs as used in
versions 1.05 and 1.06 of RILSIM is in error. In the Equipment Data Forms of RILSIM 1.05 and 1.06,
total equipment cost is calculated incorrectly because the Resale Credit is counted twice:
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First, when Depreciation Cost is calculated according to the methodology described
in RILSIM's online help system and summarized here.
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Second, when the Resale Credit is entered separately on the Equipment Data Form
as shown here.
If you aren't sure which version of RILSIM has been installed on your computer,
click here to find out how to determine the version number.
Consequences of the Error
The result of the error is that all equipment costs calculated by RILSIM 1.05 and 1.06 are
too low by an amount equal to the Resale Credit. Whether or not this has significant consequences
in an analysis of logging costs depends upon how the calculated costs are to be used:
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If the analysis involves comparing the estimated cost of reduced-impact logging with the estimated cost
of conventional logging on a single site, then the error probably would have little impact on the overall
conclusion. This is because the equipment costs for reduced-impact and conventional logging would both be
underestimated, and any difference between their total costs would tend to remain approximately constant.
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If, on the other hand, the user is attempting to calculate the best possible estimate of logging costs for
a particular operation, the error could be important.
How to Avoid the Error
The error can be avoided either by updating RILSIM or by executing a workaround:
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Update RILSIM—The error was corrected in version 1.07 of RILSIM and is not present in any
more recent version. You can update RILSIM to the latest version by downloading a free installation
module from this website. Click here for further information.
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Use the Workaround—If you prefer to continue using version 1.05 or 1.06, you can avoid the error by
ensuring that the resale credit is set equal to 0 (zero) for each equipment item in your analysis.
Simply run through all of the equipment records and enter 0 in the resale credit data field for each equipment item.
Then save the data file to make sure the changes are incorporated into the database. When you run the scenario
you'll find that the total costs are slightly higher than previously, and net revenues are slightly lower.
How has the Error been Corrected?
The data field for Resale Credit has been removed entirely from the Equipment Data Form, as
shown here. Thus it is no longer possible for users to enter an amount in that data field. When a data file from an
earlier version of RILSIM is opened, any nonzero amount for Resale Credit is set equal to zero for all equipment items.
Why was the Error Present in RILSIM 1.05 and 1.06?
RILSIM's data forms were based on procedures published in a comprehensive case study from the Brazilian Amazon, in which
costs for reduced-impact logging (RIL) were compared with costs for conventional logging (CL) under nearly identical conditions.
The report is available in two languages: English (0.4 MB PDF file)
and Portuguese (1.2 MB PDF file). The procedure used in
that study double-counts the resale credit. The error was discovered when materials were being prepared for a series of training
workshops on RILSIM that were held in Malaysia near the end of 2003. A new version of RILSIM that corrected the error was
released in January 2004.
After being made aware of the procedural error, the authors of the Brazilian study recalculated their results using the
correct procedure. Because the analysis involved a comparison of RIL and CL costs, the conclusions from the study were
unchanged. This is because the RIL and CL costs were both affected by approximately equal amounts, so that their difference
changed very little after the correction was made.