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Analysis, ranking and selection of R&D projects in a portfolio
Author(s) -
Linton Jonathan D.,
Walsh Steven T.,
Morabito Joseph
Publication year - 2002
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/1467-9310.00246
Subject(s) - data envelopment analysis , portfolio , categorical variable , ranking (information retrieval) , selection (genetic algorithm) , relation (database) , operations research , computer science , modern portfolio theory , value (mathematics) , project portfolio management , actuarial science , economics , operations management , project management , data mining , mathematics , artificial intelligence , statistics , management , machine learning , finance
A method for the analysis, ranking and selection of R&D projects from a portfolio is outlined and demonstrated. It is proposed that an objective multi‐criteria decision making method, Data Envelopment Analysis (DEA), be used to split a portfolio of projects into accept, consider further and reject sub‐groups. Next, the ‘consider further’ group is examined using a subjective method, the Value Creation Model. Such an approach allows for obvious decisions to be automated and complex decisions to be given careful consideration, an approach that is more consistent with how practising managers actually make select/reject decisions. DEA allows for comparison of variables without requiring weights or conversion factors. The relation between research strategy and consideration of categorical data is considered in relation to the research portfolio of the Advanced Technology Division of Bell Laboratories.