|M.Sc Student||Yaron Nehemia|
|Subject||Parallel Efforts of New Product development - The Impact|
of New Information
|Department||Department of Industrial Engineering and Management||Supervisors||Dr. Izack Cohen|
|Professor Avraham Shtub|
|Full Thesis text|
Parallel new product development (NPD) amounts to concurrent development of several alternatives for a single product. Such a policy is attractive when time to market is limited, outcomes (gross profits) from the developed alternatives are uncertain, and it is feasible to conduct several parallel alternatives denoted as new product development efforts (NPDEs).
Since outcomes are uncertain, NPDEs can lead to a successful product but it is also likely that a developed product will not meet its expectations. Under such circumstances, parallel NPD may increase the success rates and the expected profit from the developed product.
We characterize the problem and find some of its structural properties that help to develop management policies. Using these policies one can decide on the number of parallel NPDEs to conduct, as well as on stopping or continuing the NPDEs in order to maximize the profit. Decision points in which continue/stop decisions are made are inherently implemented in phase-gate development methodologies.
Our model considers the trade-off between the expected outcomes from the initiated NPDEs and their development costs. Through a numerical study we test the suggested policies and quantify their merits and pitfalls with respect to a common management policy in which all NPDEs are completed and compared to the best possible policy, by a prophet who knows in advance the realizations of the different NPDEs and makes the optimal decisions.
We also consider the question of how many parallel NPDEs to initiate under a policy that allows one to stop NPDEs before their completion and present insights.