Ship Investment under Uncertainty based on Real Options and Fuzzy Theory

Shipping industry is a high-risk industry, and the decision-making of ship investment means crucial to a shipping company. This paper innovatively introduced an approach combined with real options and fuzzy risk evaluation for the ship investment problem. The model in the paper assumes that the uncertainty of the expected payoffs from the ship investment is stochastic and vague and that meets well with reality. The fuzzy risk analysis can deal with the uncertainty very well and improve the effectiveness of real options in some degree. By the proposed approach, a numerical example of ship investment problem in a Chinese shipping company was solved successfully. The results show that the proposed approach is effective and efficient for solving the problem. Thus the approach can be supportive for shipping companies while making decision.