AN INTERACTIVE APPROACH TO R-AND-D PROJECT SELECTION AND TERMINATION

A decision support tool is developed that can be used by the R&D manager to effectively update his or her portfolio when a review is called for. The approach is interactive and builds on two sets of critical factors. Initially, projects are screened to see if they are at an acceptable level, and if they are making reasonable progress toward completion. Those failing the test are terminated, those remaining are weighed with candidate projects to determine which should be included in the portfolio. This is achieved with a mathematical programming routine that maximizes expected returns. A case study centering on a peripheral equipment manufacturer is presented to demonstrate the methodology.