Managing uncertainty to improve decision-making in NPD portfolio management with a fuzzy expert system

The importance of new product development (NPD) for a company's growth and prosperity is emphasized and a number of methods have been suggested to help decision-making for NPD project portfolio management. In spite of their utilities, however, little attention was paid to develop a supporting system for portfolio management that can help quick but careful decision-makings under uncertainties. Therefore, this research proposes a decision-making framework that uses a fuzzy expert system in portfolio management for dealing with the uncertainty of the fuzzy front-end of product development. For the purpose of developing the framework, we adopted the three tools - strategic bucket for strategic resource allocation, scoring models for evaluating projects and portfolio matrixes for balancing projects - to find an optimal set of projects in the portfolio. In particular, this research established fuzzy inference-based models for evaluation criteria which are too ambiguous to be numerically described. Also, based on the evaluation results, the final selection of projects is made by an expert system, which can encompass the operational knowledge and company strategy in the rule-based system. The suggested framework was applied to the portfolio analysis in an electronics firm in Korea and verified its feasibility. (C) 2012 Elsevier Ltd. All rights reserved.