School of Business

An Extension of the Analytic Hierarchy Process for Industrial R&D Project Selection and Resource Allocation

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Description: The research and development (R&D) project selection decision must address the allocation of resources to a set of proposals for scientific and engineering activities. The project selection and resource allocation process can be seen as a multiple-criteria decision-making problem within the context of the long-range and strategic planning process of an organization. The applicability of an extension of the Analytic Hierarchy Process (AHP) is explored for priority setting and resource allocation in the industrial R&D environment. An AHP modeling framework for the R&D project selection decision is developed and then linked to a spreadsheet model to assist in the ranking of a large number of project alternatives. Cost-benefit analysis and integer programming are performed to help in the resource allocation decision. The AHP is simple to use, and it can accommodate inconsistencies in human judgment. Using microcomputer-based software, such as Lotus 1-2-3 or Expert Choice, can form the basis of an expert support system for R&D project selection and resource allocation.
Language: English
Format: Article