Analysis of the economic effects of alternative investment decisions for seaport systems

Abstract

Capital budgeting techniques and queuing simulation models are integrated within an operations research framework and formulated in mathematical terms to analyse a seaport system. The analysis seeks to determine an optimal balance between the opportunity cost of ship waiting time and the cost incurred in the expansion of the seaport system. A cost benefit analysis is carried out for evaluating the alternative expansion program and their operational time tables that give the minimum present value of total costs over the planning horizon. Consequently, this study provides an integrative model framework and has developed a methodology to analyse the economic effects of alternative investment decisions at different time periods for a seaport system.