R&D project selection using the analytic hierarchy process: An application in the construction machinery industry

In a time like this where market conditions get tougher and competition has got high, companies must create good quality, low cost, different products that benefit the customer most. To meet these conditions companies must create innovative R&D projects to overcome the competitors. For this reason companies have to create new ideas and products continously. Since creating new products and ideas are crucial, they come with certain risks. Among many projects choosing the right project that fits the strategic goals and profit expectations of the company is an important stage for the future of that company. Decission makers have to choose the project that satisfies all criteria. In this paper Analytic Hierarchy Process (AHP), a multi criteria decission making method which is one of the modern decission making asisstance tools, is examined and its application in an industrial company for choosing among certain projects is shown. The target project candidates are determined by literature search and data from interviews witht the company staff. Then the decission tree belonging to the hierarchic model is formed which will help the modelling of the whole problem. In the assessment phase of the hierarchy process pairwise comparison matrices are created and the projects of the company are assessed then finally prioritized.