RILSIM 1.05-1.06 Resale Credit Error (Blue Ox Forestry)

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 RILSIM's Equipment data forms, total equipment cost is calculated incorrectly because the Resale Credit is counted twice:

First, when Depreciation Cost is calculated according to the methodology described in RILSIM's online help system and summarized here.
Second, when the Resale Credit is entered separately on the Equipment Data Form as shown here.

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:

If the analysis involves a comparison of reduced-impact logging costs as compared to conventional logging costs 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.
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 significant.

The error can be avoided either by updating RILSIM or by executing a workaround:

Update RILSIM—The error has been corrected in the current version. You can update either by ordering the new version of RILSIM, which is free, or by downloading the installation module from the Internet (also free). Click here for information on these options.
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.

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.

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 procedure used in that study double-counts the resale credit.

After being made aware of the procedural error, the authors of the Brazilian study have now 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.