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Multicriteria analysis in shipping investment evaluation

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  • Evangelos-Pavlos Rousos
  • Byung S. Lee

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.

Suggested Citation

  • Evangelos-Pavlos Rousos & Byung S. Lee, 2012. "Multicriteria analysis in shipping investment evaluation," Maritime Policy & Management, Taylor & Francis Journals, vol. 39(4), pages 423-442, July.
    • Handle: RePEc:taf:marpmg:v:39:y:2012:i:4:p:423-442
    DOI: 10.1080/03088839.2012.690080
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    References listed on IDEAS

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    1. Berthoz, Alain, 2006. "Emotion and Reason: The cognitive neuroscience of decision making," OUP Catalogue, Oxford University Press, number 9780198566274.
    2. Yoram Wind & Thomas L. Saaty, 1980. "Marketing Applications of the Analytic Hierarchy Process," Management Science, INFORMS, vol. 26(7), pages 641-658, July.
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    Cited by:

    1. Alexandridis, George & Kavussanos, Manolis G. & Kim, Chi Y. & Tsouknidis, Dimitris A. & Visvikis, Ilias D., 2018. "A survey of shipping finance research: Setting the future research agenda," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 164-212.
    2. Dina Margrethe Aspen & Magnus Sparrevik & Annik Magerholm Fet, 2015. "Review of methods for sustainability appraisals in ship acquisition," Environment Systems and Decisions, Springer, vol. 35(3), pages 323-333, September.
    3. Mark Clintworth & Evangelos Boulougouris & Byung Suk Lee, 2018. "Combining multicriteria decision analysis and cost–benefit analysis in the assessment of maritime projects financed by the European Investment Bank," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(1), pages 29-47, March.
    4. Océane Balland & Cecilia Girard & Stein Ove Erikstad & Kjetil Fagerholt, 2015. "Optimized selection of vessel air emission controls--moving beyond cost-efficiency," Maritime Policy & Management, Taylor & Francis Journals, vol. 42(4), pages 362-376, May.

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