Resource allocation in R&D departments

Resource allocation in R&D departments

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Article ID: iaor199923
Country: Canada
Volume: 36
Issue: 1/2
Start Page Number: 41
End Page Number: 57
Publication Date: Feb 1998
Journal: INFOR
Authors: , ,
Keywords: decision theory: multiple criteria
Abstract:

This paper examines the problem of allocating funds within research and development organizations, where several departments and multiple research areas must be considered. Furthermore, impacts arising from budget shifts must be measured in terms of various factors or criteria that may be qualitative or quantitative. Using a particular research and development organization, Ontario Hydro, as a backdrop, we develop a framework for evaluating budget changes when (a) multiple criteria, (b) multiple opinions, and (c) qualitative factors are involved. A three stage procedure for budget allocation is proposed. In the first stage, management responses regarding the perceived impacts of budget changes are combined to arrive at a consensus. In stage two the multiple criteria consensus values are used to derive an overall impact rating for each proposed budget shift pertaining to each of a set of research areas. Finally, in stage three an optimal subset of budget shifts is chosen from the set of all possible changes. An illustrative application is provided.

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