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Abstract

1. Purpose The purpose of this paper is to apply the traditional Grey Model, GM(1, 1), rolling GM(1, 1), and recursive residual GM(1, 1) models of Grey theory to forecast the ship prices of Panamax second-hand bulk carriers in different time periods with different sample sizes. 2. Design/Methodology/Approach This paper calculates the ship prices of Panamax secondhand bulk carriers from June 2013 to October 2017 according to the traditional GM(1, 1) and rolling GM(1, 1) models. It also calculates the traditional GM(1, 1) and recursive residual GM(1, 1) models for the traded ship prices of Panamax second-hand bulk carriers equal to or less than five-years-old, and then uses mean absolute percentage error (MAPE) to compare the degree of accuracy of the forecasting. 3. Findings This paper shows only a few differences in the accurate predictions among the traditional GM(1, 1), rolling GM(1, 1), and recursive residual GM(1, 1) models of Grey theory for the ship prices of Panamax second-hand bulk carriers. 4. Practical Implications According to the ship size class, this paper uses ‘decreasing’, ‘fair’ and ‘increasing’ to forecast the drybulk shipping markets of the interval forecasting values for the ship prices of Panamax second-hand bulk carriers. Grey theory is found highly accurate. 5. Originality/Value The traditional GM(1, 1), rolling GM(1, 1), and recursive residual GM(1, 1) models of the Grey theory all performed well enough to forecast the ship prices of Panamax second-hand bulk carriers in different time periods with different sample sizes. Armed with these findings, shipowners can better understand the assets of ships, improve the quality of sale and purchase (S & P), and strengthen chartering business strategies depending on their degree of optimism or pessimism towards sale and purchase (S & P) trading markets with the outlook for tramp shipping markets

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