Assessment of investment decisions in bulk shipping through fuzzy real options analysis

The global shipping market has been depressed and turbulent since 2008. Shipping companies have had to be more cautious with their investments, so as buck the trend get through this difficult period. Traditional net present value methods cannot help enterprises make effective investment decisions. Therefore, we employ real options theory—including expansion options, contraction deferral abandonment options—to simulate various types of operational adjustment strategies used by investors in process ship operations. Triangular fuzzy numbers generalized autoregressive conditional heteroscedasticity model are also introduced describe uncertainty volatility market. Subsequently, a binomial tree pricing is developed assess project investments. Based on calculations analysis an actual case, method shown suitable for analysis, fitting closely operating situation.