Combining multiple criteria analysis, mathematical programming and Monte Carlo simulation to tackle uncertainty in Research and Development project portfolio selection: A case study from Greece

George Mavrotas and Evangelos Makryvelios

European Journal of Operational Research, 2021, vol. 291, issue 2, 794-806

Abstract: Research and Development (R&D) is a substantial activity in the modern economy of knowledge and therefore funding R&D activities is a challenging task for private and public institutions. The difficulty in evaluation of R&D projects is mainly the inherent uncertainty that has to be dealt with. In addition, when we have funding programs, various policy constraints for the allocation of funds must be also taken into account. In this paper we propose an R&D project portfolio selection method that deals with the inherent uncertainty of R&D project evaluation. Using decision rounds with multicriteria analysis, mathematical programming and Monte Carlo simulation in the framework of the Iterative Trichotomic Approach (ITA), we manage to tackle large problems. The method is applied in a case study from Greece with 2437 project proposals from the funding action “Research-Create-Innovate” with European and National resources. Groups of experts evaluate the projects in three criteria and complex policy constraints (geographical, sectoral etc.) are also applied. The iterative nature of ITA allows for gradually converging to the final portfolio of R&D projects. The results provide information not only about the acceptance or not of an R&D project to the final portfolio, but also deal with the main source of uncertainty which is the experts’ evaluation, providing a degree of certainty for the selected and rejected projects.

Keywords: OR in Research and Development; Project portfolio selection; Uncertainty modeling; Simulation; Multiple criteria analysis (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221720308559
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:ejores:v:291:y:2021:i:2:p:794-806

DOI: 10.1016/j.ejor.2020.09.051

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().