Page 322 - Practical Design Ships and Floating Structures

297

The results from several Frameworks are then compared to support the decision as to how much
preparation for an upgrade should be included in the initial build.

4 IMPLEMENTATION

The methodology has been implemented using a MicrosoftTM Excel Spreadsheet. The data is input to a
numbcr of shccts, cach of which collects related items. For example, the first sheet defines the problem
by requiring a definition of what the MTO product is and what it produces, the major stages of the life
cycle, the currency to be used and the discount rate. Succeeding sheets detail all aspects of capacity and
market demand and prices, costs, including product related production costs and overheads. both
before and after any upgrade. The life cycle, event and annual cash flows appear as tables on later
sheets from which the required summations and the resultant NPV are automatically produced. The
entries in the tables are generated by macro programs, which calculate the appropriate data based on
the current point in the ship’s life. These tables, which may have hundreds of rows, can be checked to
enable the user to confirm that the input data has produced the expected contribution to the
summations.

Where statistical inputs are required, the Excel ‘add-in’ @Risk software from Palisade Corporation has
been used to generate the distributions. This allows any cell to have any statistical distribution attached,
so that for example a range of freight rates may be sampled. This employs a ‘Monte Carlo’ method in
which the results of a number of individual simulations are collated to produce the final distribution
and relevant statistical measures.

5 CONTAINER SHIP EXAMPLE
Ships are often upgraded about their mid-life. Some are designed with such expectations in mind, such
as warships modernised with new weapon systems - an example of upgrading triggered by new
technology. New regulations may also require ships to be upgraded, e.g. modifying passenger-vehicle
roros to meet new damage stability standards.

The chosen example is jumboisation of a container ship. The growth in deep sea container shipping has
been such over the last thirty years that not only are more ships required but larger ones. Many
container ships have been jumboised, usually by adding a new section at midships. The same number
of ships can then offer greater annual capacity at the same frequency of service.
If the ship has not been designed with jumboisation in mind, the original engine may not be able to
maintain service speed. The main hull structure will require additional strengthening to withstand
higher bending moments, shear forces and torsional moments. Auxiliary systems and fuel capacity may
no longer be adequate for the larger vessel. However if a slightly larger engine and heavier scantlings
had been built in from the start, both the cost of upgrading and the time out of service for adding the
new section and modifying the systems will be reduced, and service speed maintained.

The example illustrates a 23-knot container ship designed around 1990 with a capacity of 3500 TEU,
and examines whether it would have been worth designing for upgrading, given that the container
market was then growing steadily. Such liner vessels are designed for an average load factor of around
70-SO%, i.e. some voyages 100% full, others only half full. With an assumed growth rate of about 4% a
year, such a ship will be fully utilised after about six years’ service, but then not able to take all the
cargo offered, so vulnerable to loss of market share. The owner may decide to ‘do nothing’, i.e. leave
the ship unchanged, forego increased revenue and see his competitors take a greater market share; this