A Choice of Combinatorial Alternative in Product Development

Abstract

Product development (PD) needs to consider such characteristics as multigoals and qualitative evaluation, cost constraint and combinatorial structure of development alternatives. The term cost-performance used so far has been mainly emphasizing ex post facto the improvement in single function with respect to cost. The use of cost-performance curve (CPC), including multiple and qualitative criteria and under varied cost constraints, will be effective for better PD decision making.This paper constructs a model for selecting a combinatorial alternative (CA) in PD so as to maximize total performance under cost constraint by using Analytic Hierarchy Process (AHP) and Dynamic Programming (DP). The characteristics of this model lie in the points that the concept of CPC using the extended performance is newly introduced and the joint use of AHP and DP is originally attempted to treat with the problem. The results of analyses show that the monotonic property of CPC is effective in optimally selecting a CA. An application to CD vending machines is presented. The method treating with dependent CAs is also shown.