You are the senior manager in charge of innovation at your company. Over the past several years you company has done, only OKAY, in terms of developing a new-product development portfolio. After attending Trine University Innovation Days and listening to students discuss the importance of several strategies in selecting profitable projects through managing resources and making tough decisions on what projects live and what projects die, you have decided to take this approach to developing your companys portfolio.

After reviewing these strategies for new-product development with your director of R&D, he has decided to provide you with the necessary budget and man-power to revolutionize your companys new product portfolio. However, he noticed several interesting analysis tools based on your review of the Innovation Days, and has tasked you and your team with presenting four (4) scenarios for his review before moving forward with the go/kill decision point.

As luck would have it, your team has passed through Discovery and Scoping, and in the second screen you have already narrowed the number of projects to nine (9). You are in Stage Two (2): Building the business case. The scenarios your director has provided you are as follows:

Scenario 2 NPV PI, A New Ranking Strategy with a Budget

$25M Budget

As your company looks to manage resources, your director wants to understand how you can maximize your Bang-for-buck on the work your team is doing, and has asked you to add a NPV productivity analysis to your Go/Kill decision process. Additionally, he has capped you at $25M. Prepare a report analyzing the NPV PI of each project, rank those projects, and provide a Go/Kill recommendation for each, maintaining your $25M development budget. Maximize the NPV of your portfolio using this method.

Alpha Tango Sum of Net Present Development NPV Development Ranking Decision Value Cost Productivity Index Costs 6.5