Research Budgeting and Project Selection

A summary is presented of a study of decision-making in the area of research budgeting and project selection. Data were obtained from three major chemical companies. The objective of the study was to determine if scientific analysis could be employed to derive objective and quantitative procedures in these areas, currently dominated by a mixture of intuition, judgment, and experience. A two-fold classification of R and D is used- ``product research'' and ``process research.'' A solution is presented for the general R and D budgeting problem, involving a budgeting model. A computational procedure for this general problem is illustrated. The special problem of allocation of the budget to specific projects is treated briefly in this paper.