Date of Award
Master of Science
Industrial and Entrepreneurial Engineering and Engineering Management
Industrial and Manufacturing Engineering
Dr. Franklin K. Wolf
Dr. Henry E. Beam
Dr. Bob E. White
Masters Thesis-Open Access
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.
Paik, Chul, "Application of Risk Analysis in Investment Decision Making for New Products" (1989). Master's Theses. 4018.