A robust R&D project portfolio optimization model for pharmaceutical contract research organizations

Farhad Hassanzadeh, Mohammad Modarres, Hamid R. Nemati and Kwasi Amoako-Gyampah

International Journal of Production Economics, 2014, vol. 158, issue C, 18-27

Abstract: Pharmaceutical drug Research and Development (R&D) outsourcing to contract research organizations (CROs) has experienced a significant growth in recent decades and the trend is expected to continue. A key question for CROs and firms in similar environments is which projects should be included in the firm׳s portfolio of projects. As a distinctive contribution to the literature this paper develops and evaluates a business support tool to help a CRO decide on clinical R&D project opportunities and revise its portfolio of R&D projects given the existing constraints, and financial and resource capabilities. A new mathematical programming model in the form of a capital budgeting problem is developed to help revising and rescheduling of the project portfolio. The uncertainty of pharmaceutical R&D cost estimates in drug development stages is captured to mimic a more realistic representation of pharmaceutical R&D projects, and a robust optimization approach is used to tackle the uncertain formulation. An illustrative example is presented to demonstrate the proposed approach.

Keywords: Pharmaceutical contract research organization (CRO); Research and Development (R&D); Project selection and scheduling; Uncertainty; Robust optimization (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527314002059
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:158:y:2014:i:c:p:18-27

DOI: 10.1016/j.ijpe.2014.07.001

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().