Integration of the analytic hierarchy process and integer programming with linear constraints for long-range product-planning

Managing long range product development is a complex and difficult task. Many factors must be considered, both within and outside the corporation. Internally, projects must be completed within capital and engineering manpower constraints. Outside the company, the activities of the competition must be considered. These activities are considered during initial planning stages but can and often do change throughout the lifetime of the long range plan. It then becomes necessary to modify the planned product development schedule in order to respond to unanticipated actions by the competition. Speeding up development on one project may lead to delays in other projects due to manpower and capital constraints. This paper describes a computer-based decision making tool by which engineering managers may not only determine the impact of long range plan changes on other projects, but also identify which projects should be delayed in order to make optimal use of available resources to minimize that impact. A methodology which integrates the analytic hierarchy process (AHP) with binary integer programming and linear constraints is presented. AHP is used to determine the relative impact of project delays, which serve as the values of the objective function coefficients. A spreadsheet facilitates user input and interpretation of output from the AHP and linear programming modules. Results are presented which indicate that integration of the AHP resulted in superior solutions.