Scoring and Profitability Models for Evaluating and Selecting Engineering Projects

Abstract

Recent developments in allocation theory may be applied to research management decision problems in the firm. Of major importance to firms employing engineers in new product development activities are problems involving the specification and allocation of resources such as manpower, funds, equipment, and facilities. To solve these problems, quantitative measures of organizational performance must be derived that are consistent with corporate goals and that include the relevant resource variables, noncontrollable variables, parameters, and constraints. Mathematical models are constructed and solved in this paper that yield solutions for allocating manpower resources to projects. A scoring model is constructed and then used to determine the important factors in a profitability model. The significant elements in the decision process are the uncertainty in estimating model parameter values and the optimal utilization of limited engineering manpower resources where this uncertainty exists.