A Simulation Study on the Determination of the Best Investment Plan for Istanbul Seaport

The article involves an account of a simulation study undertaken to determine the best investment plan and the best investment year for Istanbul seaport. The best investment plan is defined to be the alternative with minimum total cost, which is the sum of investment costs and ship waiting time cost discounted to their present value. Investment alternatives considered consist of the construction of a new port, construction of a new berth for the existing port and construction of hinterland warehouses. An attempt has been made to determine the best quay length, number of cranes and warehouse capacity for the new port. The sensitivity of the best investment plan and year to different demand levels is studied. Next, another experiment is conducted to determine the effect of increased efficiency on investment requirements. In all experiments total cost is determined with three levels of inflation and three levels of devaluation rates using three levels of discount factors.