In this chapter, we discuss some of the more important determinants of the final choice of which new product projects to complete, given the kind of information that is likely to be available to the firm at the time it makes the decision. Obviously, once we depart from the optimal situation in which perfect information is available to the firm, so that the standard techniques of investment analysis can be applied to the projects, there will be no one correct method, because different firms will have different kinds of information available to them. We also have to be realistic and not rely on recommendations that it is impossible to come to the right decision unless certain types of information are available. Information-gathering constraints have to be accepted at this stage, even though earlier their validity may have been questioned. Since no one decision-making method will be right in this situation, we concentrate here on investigating the logic of decision-making of this kind, in order to facilitate the construction of the appropriate decision-making machinery for firms in different situations.
KeywordsProduct Planning Optimum Price Product Possibility Price Decision Sales Level
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- 3.See, for example, B. M. Richman, ‘A rating scale for product innovation’, Business Horizons (Summer 1962) 37–44.Google Scholar