Date of Award

12-1989

Degree Name

Master of Science

Department

Industrial and Manufacturing Engineering

First Advisor

Franklin K. Wolf

Second Advisor

Dr. Henry E. Beam

Third Advisor

Dr. Bob E. White

Access Setting

Masters Thesis-Open Access

Abstract

This study presents the development of a quantitative model to deal with the decision to invest or not invest in the development and production of a new product. It is most applicable to new products which present a high probability of economic failure. The model employs only simple mathematics and statistics, so the decision maker can easily understand the model.

The model uses as input data three variables. These include: (1) the risk of product failure, (2) the maximum loss a company can afford in an investment, and (3) the estimated project cost. These three variables combined furnish as output a recommendation to invest or not invest. All operations of the model are implemented on a user-friendly computer program written in BASIC.

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