Decision Support for Innovation Management: Application to the Lighting Industry

Haustein, H.-D. & Weber, M. (1983). Decision Support for Innovation Management: Application to the Lighting Industry. IIASA Research Report. IIASA, Laxenburg, Austria: RR-83-029

Preview

Text RR-83-029.pdf Download (2MB) | Preview

Abstract

Making decisions about resource allocation for future innovations is a challenging task in both planned and market economies. Not only can such decisions not be reversed without considerable loss of efficiency, but the decision maker generally faces a number of conflicting objectives. In this report the authors try to combine two disciplines that have been evolving independently for a long time: innovation theory and decision theory. A decision support system for managing innovations should reflect the multistage nature of the innovation process and should also be suited to multiobjective decision making. At the same time it is necessary to simplify the real situation for the decision maker in order to apply former procedures.

A very promising scheme is the decision tree, though it has shortcomings. Application of decision trees is closely connected with the evaluation process. Almost all models for evaluating innovation projects operate with only one objective. However, discussions with decision makers in the lighting industry, which shows classic features of the innovation process, revealed the necessity to include at least three objectives in the evaluation. Therefore, the authors have made use of the possibilities of multiobjective decision making.

The decision problem in this work concerns the allocation of resources to innovation projects for the 1981-85 Five-Year Plan in the German Democratic Republic. At present the model for evaluating innovation projects is based upon linear programming and decision trees. It will be improved in close collaboration with decision makers, using the results of goal programming and other aspects of decision theory.

Actions (login required)

View Item