where c* = 1 if the ith project satisfies the leth of v constraints, and 0 if it does not. Other elements in the model are as defined earlier.
Although this model is analytically tidy, in practice we would not bother to evaluate projects that are so unsuitable in some ways that we would not consider supporting them regardless of their expected performance against other criteria. For example, except under extraordinary circumstances, Procter & Gamble would not consider a project for adding a new consumer product or product line:
• that cannot be marketed nationally,
• that cannot be distributed through mass outlets (grocery stores, drugstores),
• that will not generate gross revenues in excess of $-million,
• for which Procter & Gamble's potential market share is not at least 50 percent,
• that does not utilize Procter & Gamble's scientific expertise, manufacturing expertise, advertising expertise, or packaging and distribution expertise.
Again, a caveat is in order. Exercise care when adopting constraints. It may seem obvious that we should not consider any project if it has no reasonable assurance of long-run profitability. But such a constraint can force us to overlook a project that, though unprofitable itself, might have a strong, positive impact on the profitability of other projects in which we are interested.
Dean and Mlshry's Model Beginning with the weighted factor scoring model. Dean and Nishry |16| cast the project selection decision in the form of an integer programming problem. In the problem n
Was this article helpful?
What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.