Multicriteria analysis in shipping investment evaluation

Evangelos-Pavlos Rousos and Byung S. Lee

Maritime Policy & Management, 2012, vol. 39, issue 4, 423-442

Abstract: This paper discusses the needs and possibilities of widening the traditional perspective through which shipping investment decisions are taken by embedding them in a multicriteria environment. The set off point has been the frequent observation that a shipping decision maker (DM) faced with ship investment decision-making is influenced by factors that are not clearly financial or cannot be easily quantified in financial terms. Thus, the shipping investment appraisal problem is set up as a multicriteria optimisation problem and solved using the analytical hierarchy process. In this way, the DM is able to make the optimal trade-offs between financial and non-financial considerations based on his/her individual preferences and values. It is established that in order to capture and control the biases of the immensely psychological shipping world, not only is the multicriteria analysis necessary but is also quite effective, given certain assumptions and limitations. This paper is the first attempt to evaluate the shipping investment process in a multicriterial way and is the forerunner of an alternative attempt of fleet portfolio forming and diversification.

Date: 2012
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DOI: 10.1080/03088839.2012.690080

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