Forecasting Models

MSI pursues an integrated and consistent approach to problem-solving incorporating economic, financial and technical factors into quantitative and transparent menu-driven models. Through these models, clients are able to modify MSI's Base Case forecast assumptions, enabling the user to align the model's output to their own world view. MSI's proprietary econometric models are standalone enhanced Excel products, distributed via email and are a natural complement to our market reports.

While modelling techniques can never replace business judgement, they have a number of key advantages:

First, they introduce a high degree of analytic discipline into the decision-making process. A model-builder is forced to quantify all the costs and benefits of a decision and to specify how they relate to one another. Clients can examine and reconstruct MSI's analytical process and thereby gain greater confidence in its reliability.

Second, modelling allows a decision-maker to examine the trade-offs that exist in many decisions. An example is the choice of whether to invest in modern or elderly tonnage of the same size. Modelling can be used to challenge conventional wisdom and assure management that all the alternatives have been properly examined.

Third, modelling facilitates risk analysis. The simulation properties of a model allow the decision-maker to subject the option being considered to a variety of economic, financial and technical risks (often simultaneously) and thereby develop a better understanding of the strengths and weaknesses of that option.

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