fa Production/Inventory Production/Inventory پژوهشی Original We present a stochastic dynamic programming approach with Markov chains for optimal control of the forest sector. The forest is managed via continuous cover forestry and the complete system is sustainable. Forest industry production, logistic solutions and harvest levels are optimized based on the sequentially revealed states of the markets. Adaptive full system optimization is necessary for consistent results. The stochastic dynamic programming problem of the complete forest industry sector is solved. The raw material stock levels and the product prices are state variables. In each state and at each stage, a quadratic programming profit maximization problem is solved, as a subproblem within the STDP algorithm. Optimization, Stochastic dynamic programming, Markov chains, Forest sector, Continuous cover forestry 91 96 http://iors.ir/journal/browse.php?a_code=A-10-750-5&slc_lang=fa&sid=1 S Mohammadi Limaei limaei@guilan.ac.ir 00031947532846001624 00031947532846001624 No Department of Forestry, University of Guilan, Rasht, Iran, Peter Lohmander peter@lohmander.com 00031947532846001625 00031947532846001625 Yes Optimal Solutions in cooperation with Linnaeus University, Umea, Sweden.