Strategic R&D program selection and resource allocation with a decision support system application

Abstract

Continuous evaluation of engineering project ideas for portfolio selection and resource allocation is one of the most challenging decisions that managers make on an ongoing basis. Decisions regarding project portfolios must be continuously monitored and updated due to the emergence of new opportunities and availability of more profitable projects, changes in the technical and/or commercial success probabilities, possible changes in the organizational objectives and goals, and variations in the forecasts at different points in time as the development and implementation of optimal decision rules take place. This paper presents a decision support system to assist management in systematically allocating resources to competing interrelated R&D projects under uncertainty within semi-structured decision environments. The model and the decision process integrate and extend the attractive features of scoring techniques, pairwise comparison method and probabilistic tradeoff development method.<>