Standard Article

An Introduction to R&D Portfolio Decision Analysis

  1. Kelly J. Duncan1,
  2. Jason R.W. Merrick2

Published Online: 15 FEB 2011

DOI: 10.1002/9780470400531.eorms1033

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Duncan, K. J. and Merrick, J. R. 2011. An Introduction to R&D Portfolio Decision Analysis. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. 1

    Altria, Richmond, Virginia

  2. 2

    Virginia Commonwealth University, Statistical Sciences and Operations Research, Richmond, Virginia

Publication History

  1. Published Online: 15 FEB 2011

Abstract

A portfolio is a purposeful combination of items. For research and development (R&D) portfolios these items are technologies, projects, or products. Companies have widely varying practices for portfolio selection. This article examines existing literature to determine the key characteristics of a good portfolio and how decision analysis is used to find one. The approach needs to handle multiple objectives, account for project interactions, and address the social aspect of decision making. The resulting portfolio should be aligned with business strategy, balanced, and maximize value. The article introduces general concepts that have been used to select portfolios and reviews specific applications.

Keywords:

  • portfolio;
  • Boolean logic;
  • multiattribute utility theory;
  • CPP;
  • EQUITY