THE DETERMINATION OF PORT FACILITIES MANAGEMENT FEE WITH GUARANTEED VOLUME USING OPTIONS PRICING MODEL

Authors

Kee-Kuo Chen, Associate Professor, Department of Shipping and Transportation Management, National Taiwan Ocean UniversityFollow

Abstract

This paper proposes a procedure to calculate the port facilities management fee (MF) in a build-and-lease (BL) contract with guaranteed volume (GV). The MF pricing problem exists in the contracts concluded by the lessees of port facilities and harbor bureaus for a long time. The problem is solved by analyzing the property of GV firstly, and then taking the real option approach to find the MF in BL contracts with GV. Finally, to demonstrate the method a real BL contract with GV is provided and its MF is calculated in this paper.

Recommended Citation

Chen, Kee-Kuo (2005) "THE DETERMINATION OF PORT FACILITIES MANAGEMENT FEE WITH GUARANTEED VOLUME USING OPTIONS PRICING MODEL," Journal of Marine Science and Technology: Vol. 13: Iss. 1, Article 7.
DOI: 10.51400/2709-6998.2104
Available at: https://jmstt.ntou.edu.tw/journal/vol13/iss1/7