Note---A Note on Economic Models for R&D Project Selection in the Presence of Project Interactions

Paula M. Goldstein and Howard M. Singer
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Paula M. Goldstein: AT&T Information Systems, Crawfords Corner Road, Holmdel, New Jersey 07733
Howard M. Singer: AT&T Information Systems, Crawfords Corner Road, Holmdel, New Jersey 07733

Management Science, 1986, vol. 32, issue 10, 1356-1360

Abstract: In their paper, "Economic Models for R&D Project Selection in the Presence of Project Interactions," Fox, Baker, and Bryant (Fox, G. E., N. R. Baker, J. L. Bryant. 1984. Economic models for R and D project selection in the presence of project interactions. Management Sci. 30 (July) 890--902.) proposed a model that included benefit interactions, called present value (PV) interactions, between R&D projects. Several computational errors in this paper invalidated the illustrative example which sought to demonstrate that ignoring the PV interactions could result in both nonoptimal project selections and resource allocations. However, a single correction yields an example that supports the authors' central premise. Furthermore, we believe that the model itself can prove useful in real applications.

Keywords: R&D management; project selection (search for similar items in EconPapers)
Date: 1986
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